Realcast: Market direction hard to call, hotels beds in, London gets luxurious, MIPIM in mind

In the headlines this week:

At Real Asset Media’s recent Global Trends session, Stefan Wundrak senior researcher at our host Nuveen, pointed out that nobody currently knows where there current price correction is going, although there are marked differences between the three main world regions, with Europe worst hit, Asia stagnating and US demand slowing. There are concerns about gloomy reports from the US because the market tends to indicate the future for Europe.

However, one sentiment expressed was that the worst could be over in Europe and if banks halt interest rates earlier than previously predicted, this could be good for property values. However, recent events prove that property has functioned as it was supposed to, hence the increasing collective allocation to the sector.

But on the whole, as Wundrak underlined, real assets have really done their work, they’ve over performed in 2022 and it’s shown by the fact that global institutions are increasing their allocation to real estate. The fundamentals are good with occupier demand still robust, lettings occurring and tenants paying their rent.

ESG remains high on the agenda but some US pension funds are questioning the political decisions being made in relation to ESG.

Hospitality deals have been back in the news with Cheney backing a €62 million revamp of a five-star hotel in Helsinki, Swedish Pandox paying £53 million for a hotel in central Leeds in the UK and now Dar Global aiming to raise $72 million through a direct listing in London which will value the company at about $600 million, with its board led by non-exec chair David Hunter, former president of the BPF.

Also in London, redevelopment plans for Earl’s Court have been unveiled (see news story) and movements are occurring in the luxury shopping sector in Mayfair: luxury group Kering is selling it’s Gucci and Saint Laurent block at Swan House on Old Bond Street at the same time that a flagship store let to Kering brand Alexander McQueen is being sold.

Elsewhere in the UK, CBRE Investment Management secured two new local government pension fund schemes to invest in its UK affordable housing fund.

Living and affordable housing will be among the topics that that will pick up during our sessions at MIPIM.

Click on the video to see the full discussion or listen to the podcast below.