Realcast: French sheds shine, Euro-volumes fall, Blackstone exits harbour, shop tills ringing
This week in the spotlight:
Real Asset Media and Garbe’s briefing on the French logistics market emphasised that the market there is highly resilient and the economy still strong with good fundamentals: lower inflation than elsewhere in Europe, a stronger economy and higher consumer spending. Meanwhile, investors are scrambling for logistics opportunities on the traditional route from Lille to Marseille, but also in other regions. Relatively low logistics rents are attracting occupiers and Garbe said now is the time to invest because of scope for rent growth and because other investors are sitting on the fence. Also, as many institutional investors are shying away from CEE assets because of proximity to the war, France is seen as a good place to invest.
The market is expected to reassert itself in H2 but much of French warehouse stock is Grade B in need of refurbishment, which is also a good opportunity for investors.
Meanwhile, research from MSCI Real Assets reveals that, Europe-wide, commercial real estate investment plummeted in the final quarter of 2022 and investment activity in Europe during the whole year fell 25% to €291 billion. While Germany was particularly affected, London became the number one investment destination in 2022, despite its volumes being substantially reduced.
Price adjustments in the market are an opportunity for some though and South Korea’s Samsung SRA Asset Management has awarded AEW a €375 million mandate to invest in repriced European core and core-plus assets as the market correction continues, starting with offices in the UK.
A study by Empira Group meanwhile focuses on the untapped potential for non-bank, loan-based financing for institutional investors in continental Europe. While non-bank lenders provide about 40% of debt for financing US commercial property the proportion in continental Europe is much less.
Meanwhile, in a city starved of major deals, one of London’s first of 2023 could be Blackstone’s sale of the St Katherine Docks mixed-use district next to London’s Tower Bridge to Singaporean investor City Developments for around £400 million.
There is good news too from the UK’s retail sector where the number of vacant high street shops fell during Q4 last year and the vacancy rate improved. In continental Europe a strong year saw Via Outlets transact 300 re-merchandising deals and increase visitor spend across the portfolio to enjoy its best year ever, exceeding €1.2 billion of brand sales, an increase of 27% on 2019.
And in further positive reports, this from over the Atlantic, British businessman James Daunt, responsible for reinvigorating Waterstones, has been running US retail giant Barnes & Noble which is preparing to open dozens of new stores across America. This includes some locations from which even Amazon has retreated.
In other news: Aviva Investors’ annual survey found that 93% of Global Investors take ESG into account; Munich-based investment and asset manager KGAL and developer-contractor Pfalzsolar have formed a JV to develop solar parks in Greece; and Primonial CEO Jurgen Fenk has resigned – news of his next step is awaited.
Click on the video to see the full discussion or listen to the podcast below.