Europe’s alternative assets sectors ‘need to be bigger’

Although alternatives have grown in significance Europe as investors move into areas such as self storage and the healthcare sector, alternatives as a whole are where we can expect the growth to come from according to Dominique Moerenhout, CEO of the European Public Real Estate Association (EPRA).

However, speaking at the recent EPRA conference staged in Paris, he said that the alternatives’ share of the market in Europe needs to be bigger.

“In the US today, if you look at the alternative sector, it represents 40 to 45% of the total market capitalisation,” Moerenhout said. “In europe it’s only 12%, so there is a huge potential to grow.”

He pointed out that there are new sectors which have been performing very well during the pandemic and in the current economic context, such as data centres, cell phone towers and life sciences.

But he said that companies in the health care sector need to be bigger. “We need to have more and more of those companies to come to the publicly listed market.”

He said that although both economic and geopolitical trends have created a turbulent backdrop, “the European listed real estate sector has been very resilient.”

And it has been performing much better than during the global financial crisis he added.

“The sector has drastically improved its balance sheet and compared to the GFC, loan to value ratios are lower and the debt structure of companies is now fixed for the longer term.”