Still investment opportunities despite reset likely in 2023

Although the real estate investment market could be due for a reset in 2023, there is still plenty of equity around from diverse sources says Cromwell Property Group head of investment management Europe Andrew Creighton

The last six months of 2022 were “interesting and difficult”, Creighton says, courtesy of volatility of bank debt which spilled over into the general market place.

Yields moved out as a mathematical response to the increasing debt cost, but interest rate rises and wage-cost inflation have increased nervousness. But equity is available and from “different pockets and different areas of the risk curve,” Creighton says.

“I think there will be pressure to invest [in 2023] both from private equity and from institutional capital, but I suspect private equity will probably lead the way,” he adds.

“Logistics will certainly be at the forefront of real estate investment because I can still see a rationale for rental growth” says Creighton.

He says that although costs including labour are increasing due to inflation, “there is still room for some rental growth so I suspect you’ll be able to put that in your appraisals.”  

He also said that in some locations asset values have been quickly reappraised so investors can be more certain that acquisitions will still be worth what was paid into the near future.

“I do think the opportunities are there,” Creighton adds.

Please click on the video above to watch the full interview or listen to the podcast below.