‘We are incredibly positive on the London story’

Many investors have adopted a wait-and-see attitude to London to see how the UK’s fraught departure from the European Union pans out, but this is creating opportunities for others.

A focus on strong European cities with economies that will outperform will serve investors well, experts agreed at Real Asset Media’s Global Capital Flows & Winning Cities investment briefing, which was held at the International Investors’ Lounge at EXPO REAL recently.

‘If there’s anything we should have learnt from the last cycle, it’s that chasing yield is not an investment strategy,’ said Daniel Harris, Principal – Head of European Investments, CAIN International.  His advice is not to go to secondary cities but rather ‘focus on Europe’s gateway cities, because when there are bumps in the road they bounce back the quickest’.

Large cities like Paris, London or Madrid are underpinned by solid macro fundamentals that will withstand economic fluctuations and they will continue to attract young talent, which will guarantee future growth. The same applies to the two clusters of Holland Metropole and the Rhine-Ruhr in Germany.

Andrew Angeli, Head of European Strategy and Research, CBRE Global Investors, Damian Harrington, Director, Head of EMEA Research, Colliers International, Daniel Harris, Principal – Head of European Investments, CAIN INTERNATIONAL, Stefan Walter, Managing Partner RSM Austria Steuerberatung GmbH and Larry Young, Head of International Investment Group, BNP Paribas Real Estate discuss the Capital Flows through the European Real Estate Investment Market. Filmed at the International Investors Lounge at EXPO REAL by Real Asset Media.

Many investors have adopted a wait-and-see attitude to London to see how the UK’s fraught departure from the European Union pans out, but this is creating opportunities for others.

‘We’re incredibly positive on the London story,’ said Andrew Angeli, Head of European Strategy and Research, CBRE Global Investors. ‘It’s generating returns in excess of Europe and now, because of Brexit, it’s a less competitive market, which is something we absolutely want to make the most of’.

Investors with a long-term view look beyond current instability, which in any case is not confined to the UK, said Harris: ‘We are big on London. Once the Brexit issue is resolved there’ll be a huge inflow of capital into the city’. 

Money will definitely flow into London again, agreed Larry Young, Head of International Investment Group, BNP Paribas Real Estate: ‘Investors want to get back, it’s not a question of if but rather of when. The pricing is interesting, especially for value-add, and they know they can make very good money’. 

Damian Harrington, Director, Head of EMEA Research, Colliers International said that the impact of Brexit has been such that ‘the UK is the most mispriced market in Europe’.


‘It makes sense to invest in German resi’

Sven Henkes, CEO ZIEGERT – Bank und Immobilienconsulting GmbH

Sven Henkes, CEO ZIEGERT – Bank und Immobilienconsulting GmbH

Sven Henkes, CEO ZIEGERT – Bank und Immobilienconsulting GmbH, tells The Real Estate Day that each city offers opportunities, from Berlin which has had double digit growth every year for the past ten years to Frankfurt which is benefitting from Brexit to Hamburg where yields are better Filmed at the International Investors Lounge, EXPO REAL 2019 by Real Asset Media.


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‘Student Housing is the n1 alternative asset class’

The sector took off in the US first, then in the UK and now it is having an impact in Continental Europe, growing well beyond its initial niche status.

Student Housing has become the number 1 alternative asset class out of 19 in terms of volume, with over 700 companies investing in the sector, delegates heard at Real Asset Media’s Student Housing, Micro & Co-Living investment briefing, which was held at the International Investors’ Lounge at EXPO REAL recently.

‘There is a wall of capital ready to be deployed and a pipeline of €10.6 bln of new projects in Europe,’ said Samuel Vetrak, CEO of Bonard. ‘The only problem is that it is difficult to find the right product to invest in’.

The sector took off in the US first, then in the UK and now it is having an impact in Continental Europe, growing well beyond its initial niche status.

Rienk Oosterhof, CREO, The Student Hotel, Samuel Vetrak, CEO BONARD, Clare Thomas, Partner CMS, Rainer Nonnengässer, CEO International Campus GmbH, Thibault Valla, Debt & Special Situations LaSalle Investment Management discuss the current trends and investment outlook for Student Housing, Micro-Living and Co-Living Filmed at the International Investors Lounge at EXPO REAL by Real Asset Media.

It is attractive to investors because it is mature and transparent and because ‘it will continue to deliver in economically challenging times,’ he said. ‘International student demand remains strong and consistent regardless of the cycle’.

Demand is high and rental growth has been above inflation. ‘In some hotspots like Dublin or Porto we have seen double digit growth,’ Vetrak said. Iberia, the Netherlands, Germany and Italy are the main markets for new development, along with the UK where investments are set to grow because of the weakness of the pound and a loosening of regulations.

The UK has a bed-to-student ratio of over 25%, while in Continental Europe it is just 13% and as low as 5% in some cities. 

According to new data presented by Bonard, an independent research provider that specialises in alternative asset classes, 1.1 million student beds need to be built in Europe to keep up with the UK. The current pipeline of 592 projects, which represent a €17 bln investment, will deliver 151,000 private beds in the next two and a half years.

Vetrak identified three distinct markets that can appeal to different investors. The first is super-sized cities with over 30,000 international students. In Europe they are Paris, Vienna, Madrid, Berlin and London, which is way ahead with over 110,000.

The second is big cities with a student population of between 15 and 30,000, which include Munich, Rome, Barcelona and Budapest. The third is mid-sized cities with between 5 and 15,000 international students, such as Amsterdam, Frankfurt, Oslo, Heidelberg and Turin.

Opportunistic investors focused on returns rather than volume will opt for the niche cities, while institutions wanting big-ticket items will focus on the super-sized cities. 


‘There’s a new good reason to invest in Belgian real estate’

Vincent Thyrion, Registered Auditor, RSM Inter Audit

Vincent Thyrion, Registered Auditor, RSM Inter Audit

Vincent Thyrion, Registered Auditor, RSM Inter Audit, tells The Real Estate Day that the new Special Investment Fund, a new structure for investment in property, is an attractive regime that allows professionals to invest and then avoid paying tax at the exit


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‘It is great to be in retail today’

Even with economic growth slowing down in some European countries, evidence shows consumers are still happy to shop.

Despite negative sentiment in some quarters, the retail sector is not in crisis mode. It is in fact changing and becoming a more interesting asset class to work in, experts agreed at Real Asset Media’s European Retail Investment briefing, which was held at the International Investors’ Lounge at EXPO REAL last week.

‘It is great to be in retail today,’ said Eric Decouvelaere, Head of Retail EMEA, CBRE Global Investors. ‘We used to be in a supply-driven model and falling asleep on the job. Now we have a demand-driven model, consumers are changing, retailers are adapting and landlords are being much more reactive and collaborative’.

Now the emphasis is less on the bricks and mortar element and more about curating the activities that take place in the buildings. 

‘For 30 years the creative element of retail was silent, but its importance is being realised,’ said Bill Kistler, Executive Vice-President & MD EMEA, ICSC. Everyone talks about mixed-use these days, but ‘the real catalyst is retail,’ he said. ‘You cannot have a successful product mix without retail’.

Eric Decouvelaere, Head of Retail EMEA CBRE Global Investors, William Kistler, Executive Vice President & Managing Director- EMEA ICSC, Herman Kok, Head of Research, Meyer Bergman, Eri Mitsostergiou, Director of European Research Savills and Andrew Westbrook, Partner, RSM UK discuss the outlook for the Retail Investment Market in Europe. Filmed at the International Investors Lounge, EXPO REAL 2019 by Real Asset Media.

Even with economic growth slowing down in some European countries, evidence shows consumers are still happy to shop. What they are doing is opting to spend their money on different things, said Eri Mitsostergiou, Director of European Research, Savills: ‘They go for more experiential sectors like eating out or health & beauty, which are growing faster than traditional shopping, so we must redesign our retail spaces to cater for these changes’.

The hands-off approach no longer works in today’s retail environment.

‘At the end of the day intensive asset management is what makes the difference in retail,’ said Decouvelaere. ‘You need operational teams on the ground with a good knowledge of the market. The other key to success is looking at the three C’s when buying assets, whether it is a shopping centre or a high street shop: catchment area, connectivity and condition. If those two conditions are fulfilled, then you can still find some very good opportunities in retail’.  


‘Lancashire is a land of opportunity’

Stephen Young, Executive Director, Lancashire County Council

Stephen Young, Executive Director, Lancashire County Council

Stephen Young, Executive Director, Lancashire County Council, tells The Real Estate Day that the county with a population of 1.5m is the only one in England with three enterprise zones and has a buoyant property market especially in logistics, residential and grade A offices


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‘Logistics is still in growth mode’

Germany, the Netherlands and CEE countries have been at the heart of the Logistics boom over the last few years and continue to attract investors’ attention.

Logistics has been flavour of the month for several years now but the sector is still in growth mode and investors can find opportunities, delegates heard at Real Asset Media’s European Logistics Investment briefing, which was held at the International Investors’ Lounge at EXPO REAL last week.

‘Lower for longer interest rates are leading even more investors across the spectrum to deploy their capital in Logistics so pricing will get even sharper over the next 3 to 6 months’, said Philip Dunne, Head of Logistics EMEA, CBRE Global Investors. ‘But you can still find opportunities by partnering with good quality developers’.

Germany, the Netherlands and CEE countries have been at the heart of the Logistics boom over the last few years and continue to attract investors’ attention.

‘Germany is the driving force in Europe,’ said Robert Dobrzycki, CEO Europe, Panattoni Europe. ‘We have an established presence in CEE and have reached our limit there, so we are pursuing a pan-European strategy and see the Netherlands as the next place to grow our business. We feel it is the perfect time to expand’.

Demand is coming from investors traditionally interested in the sector, from retail investors moving their allocation to logistics and now from bond investors as well, so there is a lot of capital ready to be deployed.

‘Germany and the Netherlands are a focus for us, because 25% of GDP is still manufacturing, so there are many drivers for logistics, not just e-commerce,’ said Ingo Steves, Managing Director, Gazeley North Europe. 

There are opportunities in Southern Europe as well. ‘Northern Italy is absolute value for money, but the problem is finding product,’ said Dunne. 

‘There is a huge appetite for Logistics in Spain across the spectrum, from big box to urban logistics, with new players coming into the market even for smaller deals and second-tier locations,’ said Alvaro Otero, Partner, CMS Spain. 

The problems virtually all European locations share is scarcity of product to buy and lack of land to develop.

‘Finding land is the main challenge,’ said Dobrzycki. ‘There are variations in different markets, but in general land is more difficult to buy, while demand from investors is strong and the markets are getting tighter’.


‘The Dutch market has great potential for us’

Sebastien Berden , COO Health Care, Cofinimmo

Sebastien Berden , COO Health Care, Cofinimmo

Sebastien Berden , COO Health Care, Cofinimmo, tells The Real Estate Day that they are investing for the long term in the Netherlands, where they have the full healthcare spectrum available from senior living to hospital care to acute care which is quite a unique situation


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Brexit ‘the cream on top’ for Germany

Even now that the economy is slowing down, investors do not doubt Germanys resilience or stability.

Brexit is just the ‘cream on top’ as there are other drivers behind Germany’s rising appeal in investors’ eyes, experts agreed at Real Asset Media’s Germany Investment briefing, which was held at the International Investors’ Lounge at EXPO REAL last week.

‘Brexit has been an advantage for Germany and has led directly to an increase in demand and in prices, but it is just the cream on top,’ said Rainer Schorr, Founder & Owner, PRS Family Trust. ‘There are other factors at play, notably low interest rates and the safety issue. For pension funds and family offices all over the world Germany is a safe haven, not just in Europe but on earth. Their number one objective is capital preservation’.

Even now that the economy is slowing down, investors do not doubt its resilience or stability.

Tobias Schultheiß, Managing Partner Blackbird Real Estate GmbH, Sven Henkes, CEO ZIEGERT – Bank- und Immobilienconsulting GmbH and Rainer Schorr, Founder & Owner PRS Family Trust GmbH discuss the German Real Estate Investment Market. Filmed at the International Investors Lounge, EXPO REAL by Real Asset Media.

‘Stability used to be boring but at a time of insecurity it becomes an important asset,’ said Sven Henkes, CEO, ZIEGERT Bank und Immobilienconsulting. ‘Add to that a transparent market, great liquidity, clear regulations so that investors know exactly what they can and they cannot do, and you get the current situation where supply cannot keep up with demand and prices keep rising.

The residential sector is a safe haven within the safe haven, he said, because of the supply/demand gap, particularly in Germany’s main cities.

‘We see a very positive future for the residential sector in Germany,’ said Henkes. ‘Our new report focuses on Germany’s top 8 cities and it shows they are all developing strongly and growing faster than the rest of the country’. 

International investors’ interest is such that sometimes domestic capital chooses to take a step back. ‘In Germany often local investors will not compete with foreign investors,’ said Tobias Schulteiß, Managing Partner, Blackbird Real Estate. ‘The locals know the issues and the problems and they don’t want to pay too high a price, but foreign investors want to be in Germany at all costs and they are prepared to pay’.

They tend to stick to the main cities they know, but ‘in Germany there are many regional cities they have never heard of that actually deliver better returns,’ he said.