Diversification the best way to navigate challenging market

Diversification is the name of the game for BayernLB in terms of geography as well as asset classes, Alexander Huber, Global Head of Real Estate, and Laura Williams, Head of Real Estate UK, told Real Asset Media’s Richard Betts.

“The market is still challenging but the outlook for investors is slightly more positive”, said Huber. “We still want to grow our international business. We have focused on residential in the UK, for example, as a real opportunity to diversify our portfolio”.

Across Europe there has been a shortage of transactions and there is more competition in the lending market, although there is no shortage of equity or debt.

“In the UK and elsewhere in Europe we are focused on growing the book”, said Williams. “We are in a good position, as we have the presence and expertise to follow our clients in different countries. We tend to focus on residential, logistics, and best-in-class retail and offices.”

This is in line with what investors are most interested in now: operational real estate is attracting more capital, be it PBSA or data centres, Huber and Williams agreed, and the logistics sector is still popular, while offices are only on the radar if they are top quality, ESG-compliant and in the best locations.