- November 1, 2013: Vol. 7, Number 10

To read this full article you need to be subscribed to Institutional Real Estate Europe

Leaving safety behind: Does Europe’s recovery signal a shift in real estate investment strategies away from safe-haven markets?

by David Neil and Philip Bjork

By mid-summer 2013, a number of early signals, including a return to positive territory for GDP growth, suggested that the European economy had finally reached a turning point in its long path to recovery. Fixed-income investors are adjusting risk and return criteria, resulting in rising bond rates in safe-haven markets. Investors are increasing their risk appetite in search of yield. This raises the question of whether real estate investors should follow suit. Since the onset of the downturn, real estate investing has been narrowly focused on prime, income-secure assets in a limited number of perceived safe-haven markets, including France, Germany, the United Kingdom and the Nordic countries.

Together, these markets account for a little over 85 percent of capital invested in 2012, yet represent 57 percent of European GDP. Within these markets, risk aversion has resulted in strong pricing of prime, income-secure assets despite modest rental growth expectations and rising cap

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?