Publications

- April 1, 2019: Vol. 13, Number 4

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Investors not attracted by low-returning debt strategies

by Marek Handzel

Real estate debt strategies are not delivering enough returns to attract investors in mainland Europe.

The message was delivered in Amsterdam by a number of speakers at Institutional Real Estate Inc’s 2019 Visions, Insights & Perspectives (VIP) Europe conference on 20 February, who expressed reservations about using debt to gain further exposure.

Bert Van den Hoek, a senior vice president at Partners Group, told delegates that the returns on offer from senior debt are too low to meet minimum return requirements. “With an interest rate rising environment, real estate debt may be the first to crumble, particularly on the senior side,” said Van den Hoek.

Matilde Attolico, global head of funds advisory at JLL corporate finance, agreed, explaining that although new debt players were appearing in Europe, they have not been able to attract the same amount of interest from institutional investors as they have in the United States.

“US debt fu

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