The current high levels of inflation and rising base rates are creating a more challenging context for investors in the Netherlands, as in the rest of Europe, pointed out Peter Helfrich, Managing Partner, Primevest Capital Partners.
In conversation with Real Asset Insight’s Richard Betts, he said that there is currently and investment environment that is both interesting and demanding with good levels of occupancy, low unemployment but rising inflation.
“We deal with future cash flows and, no matter how you put, it they will be eroded by the fact that there is huge inflation so you’re looking for inflation hedges. But if inflation is 10% you cannot increase your rental levels by 10%, sometimes because of CPI protection, but also because your tenant may not survive,” Helfrich said.
Primevest is active in the parking mobility, communications infrastructure, fibre to the home sector and residential sectors.
“We are a core investment manager, very much focusing on cash flow streams and we are rather defensive so in a market which is upward and rising there tends to be better returns probably somewhere else,” he explained. But, he added, the defensive position of the company means cash flows should be protected in the current market.
Parking garages are likely to be an increasingly important sector as more municipalities try to ban cars from city centres. “You will see a shift towards parking garages around cities,” Helfrich said.
Car park use must be rethought, however. People will be use them for longer periods of time and as they may increasingly use electric cars and travel onwards using electric bikes or scooters, much greater charging infrastructure will be required.