- February 1, 2011: Vol. 5, Number 2

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For the Greater Good: If You Don’t Deal with Risk It Will Come Up and Bite You

by Richard Lowe

In October 2010, Henderson Global Investors published a research report on what it called the “investment timing paradox”. The investment manager argued that European real estate investors should consider moving up the risk curve to benefit from a risk premium that had arisen as a result of everyone flocking to the safety of core property. “We should see investors starting to deploy capital strategically in order to benefit from the new cycle [that is] emerging,” the report stated. “This is not, however, what we witness in Europe’s property investment markets, where investors and lenders still operate in risk-aversion mode, almost exclusively focusing on core assets.”

This widespread reluctance among investors to raise their heads above the parapet can be partly explained by a continuing uncertainty over the economic

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