Continental drift: Real estate investment provides a good example of Europe
The continental European real estate market is gaining ground on the United Kingdom and other markets that have been quicker to recover in this cycle. The start of the recovery in capital values on the continent, coupled with cyclical opportunities to add value through asset management, has drawn investors back to Europe.
Historic cyclical return patterns
Some European markets — such as Switzerland and Austria — demonstrated very little distress after the financial crisis. However, for Europe’s largest and most transparent markets there was a more significant correction in values. The UK real estate market was the first in Europe to recover strongly after the financial crisis, having experienced a significant renaissance in recent quarters. Europe’s recovery has been a more recent event. If we consider the European economic recovery to be in place, combined with the current “lower for longer” interest rate environment, we can expect this tre