Institutional investors skill up to take more risk in France

Opportunistic and value-add players in France are veering away from traditional real estate investment in France and potentially going elsewhere, such as Italy and Greece, according to Guillaume Turcas, managing partner, Faro Capital Partners.

Turcas said the relationship between core, value-add and opportunistic investing in France has shifted. “I would say there is no classification of risk and the long-term players are assuming the risk that I would say the short-term players ought to assume.”

Turcas added: “from a value-add perspective, I would say either you have to be lucky/patient or have a really good debt partner.”

Institutional money is playing a bigger role, he said. “I think the long-term players are the ones that have been pushing the price and I think, as of now, they’re assuming a lot more risk.”

But he added that nowadays they have the professional staff they can handle that level of risk. “Instead of being at the end of the chain paying the prime yield they prefer to step ahead, having a lot of premium on the yield they’re getting.”

Click on the video to watch the full interview or listen to the podcast below.