- January 1, 2011: Vol. 5, Number 1

To read this full article you need to be subscribed to Institutional Real Estate Europe

A Timing Paradox: Investors Are Still Nervous About the Economic Outlook but Could Gain from a Move Up the Risk Curve

by Stefan Wundrak

In 2009, the world economy went through a deep recession. Since then, we have come a long way. The main European economies have returned to growth and forecasts continue to point to a muted average GDP growth recovery of about 2.5 percent per year over the next three years across the core European countries. In this environment, property occupier markets should also be close to their trough, and we should see investors starting to deploy capital strategically in order to benefit from the new cycle that is emerging.

This is not, however, what we are witnessing in Europe’s property investment markets, where investors and lenders are still operating in risk-aversion mode, almost exclusively focusing on core assets. In the current risk-conscious climate, however, a high level of security does not come cheap. With prime yields recovering strongly, investors appear willing to pay substantial premiums for long-dated secure income. The prevailing investment approach implies that in

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?

We respect your privacy! Please give consent for processing data as described in our Privacy Policy