Large pockets of European investors broaden their horizons
Traditional core asset returns are sinking, and real estate investors are broadening their horizons as a result.
Emerging sectors such as senior and student housing are reporting increased deal volume. In its Trends for 2018 report, PGIM Real Estate has said that low returns on mainstream commercial assets are likely to fuel further demand for non-traditional sectors. “[These] typically offer higher yields, and often benefit from structural demand growth, such as ageing populations or rising student numbers,” says the manager.
PGIM’s prediction is backed up by Union Investment. In a survey gauging sentiment, Union has found that around 50 percent of investors in Germany, France and the UK do not believe they will achieve their own yield targets within the next three to five years. 56 percent of them are not prepared to alter their risk strategies, choosing instead to accept lower returns, but 37 percent are willing to take on more risk to boost their cha