European investors find themselves in the midst of an unprecedented low-yield environment. Government bond yields have been falling consistently since 2008, with German 10-year Bund yields trading in negative territory and European BBB-rated corporate bonds currently offering not much more than a 1 percent yield. Furthermore, with the European Central Bank’s recent quantitative easing programme and the potential for further QE to come, an excess of liquidity in the market has meant that this situation is likely to continue for the foreseeable future, as an abundance of capital chases ever-diminishing returns.

In this new environment of low and sometimes negative rates, both private and institutional investors seeking yield have increased their appetite for alternative investments; in particular, for European core and core-plus real estate assets. As a result, this influx of capital has driven down yields in these markets since 2012. Thus, it is against this background that