Slowing down

There has been much talk in recent years about the “Japanification” of Europe. The continent is experiencing an extended low-growth, low-inflation and low-interest environment, which is often compared to Japan’s economy during the early 1990s. But is it a fair comparison, are there lessons to be learned, and what does it mean for real estate?

“There are demographic parallels, such as weak population growth, urbanisation, and ageing, which are all critical to the physical use and occupation of real estate,” explains Simon Martin, senior partner, head of investment strategy and research at Tristan Capital Partners. “Parallel economic behaviours, corporate decisions and government interventions are also playing out in Europe, similarly to how they did in Japan.”

Andrew Angeli, head of European real assets research at CBRE Global Investors, appreciates the analogy. “In Japan, there was a massive asset price correction, particularly in real estate, followed