More capital will be allocated to European real estate from all over the world, as the ‘lower for longer’ interest rate environment makes investing in property attractive, experts told The Real Estate Day.
‘There has been a fundamental shift in the market and it is a fact that bond portfolios are not very attractive, so in this scenario real estate wins,’ said Andrew Angeli, Head of European Strategy and Research, CBRE Global Investors. ‘I expect allocations to real estate to grow over the next few years’.
Capital is coming from East and West and from old and new investors.
‘South Korean and Singaporean investors are very active in the market and US capital, after divesting for a few years, has started to come back to Europe with a more value-add strategy,’ said Damian Harrington, Director, Head of EMEA Research, Colliers International.
What is positive is that ‘there are new investors coming that we haven’t seen before, from the US, Canada and elsewhere,’ said Larry Young, Head of International Investment Group, BNP Paribas Real Estate. ‘Japan has been knocking on the door for a while, focusing on joint ventures, but we are still waiting for a big commitment’.
Europe’s low interest rate environment should be very familiar to Japanese investors, pointed out Harrington: ‘They have had it for ten years so they should feel right at home, but they are very cautious investors who prefer a long, slow play’.
Looking at sectors there is a big drive towards hospitality and residential in all its forms, but logistics and offices also continue to attract capital, while retail is definitely not flavour of the month.
‘As a value-add opportunistic buyer, we look at the situation and it’s a very good picture for investing in,’ said Daniel Harris, Principal – Head of European Investments, CAIN International.
‘We’re definitely seeing more interest from Asia and elsewhere,’ said Stefan Walter, Managing Partner, RSM Austria Steuerberatung. ‘They target the winning cities first, but there is a shift as they are also looking at less obvious places. Greece, for example, is a more attractive destination as the country recovers. My advice is to take the long-term perspective and keep looking for new opportunities’.
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