As we all well know, the real estate investment landscape has shifted dramatically in Europe since the reintroduction of higher interest rates and lower loan-to-value (LTV) offers.

A fundamental change due to the new environment, of course, is that banks have become far more cautious in all their lending activities. In certain sectors, where they were willing to lend two years ago, banks are now unwilling to proceed. In other segments, where they are still willing to lend, the interest repayment rates on offer are much higher and the LTV is much lower. In Germany, for example, interest rates are up from about 1.5 percent some two years ago, to about 5 percent today. And where the banks would previously lend on an LTV of about 80 percent two years ago, they are now lending at 50 percent to 55 percent LTV — in best-case scenarios.

Consequently, investors who used to buy income-producing real estate, such as residential assets in Berlin, at a yield between 3 percent and