The era of cheap money is over. During the past 18 months interest rates have risen, hiking the cost of debt and at the same time increasing the attractiveness of asset classes such as fixed income. This could potentially create some headwinds for the real estate sector if investors reduce their exposure to real estate and tilt towards other asset classes.

The ultra-low interest rate environment that followed the global financial crisis encouraged investors to adjust their portfolios in search of higher returns. Government bond yields, especially in Europe, were incredibly low or even negative in some instances, and many investors pushed up their allocations to alternative investments such as real estate. Allocations to real estate are currently significantly higher than they were a decade or two ago. Will this prove sustainable over the coming years? I think it will.

In 2024, we will start the shift back towards a more normalised monetary policy environment. Although