Institutional Real Estate Europe

July 1, 2011: Vol. 5, Number 7

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From the Current Issue

Europe

Don’t Fear the Norsemen: Nordic Markets Appear Safe Thanks to Favorable Economic Underpinnings, but Competition for Core Properties Can Be Fierce

At the risk of oversimplification, southern and northern Europe have taken variant fiscal and economic paths in recent times. Laid back southern Europe is plagued by sluggish economies, some still contracting, and unsustainable debt-to-GDP ratios. The more austere north is (mostly) perceived as a safe haven of sorts, having its economic house in order. We should not be surprised, therefore, that investors gazing toward the north-west corner of Europe above the 54th parallel see a sunny outlook for real estate on the Scandinavian Peninsula.

Europe

Wind in the Sails: Markets Are Laying the Foundations for Growth, and Investors Are Recognising the Benefits of an Allocation to Real Estate

The commercial real estate recovery that many investors hoped would take root has now started in earnest. Prime assets in core markets have led the way with strengthening occupancies, diminishing concessions and rising rents. The signs pointing to this recovery have not gone unnoticed, as evidenced by last year’s re-emergence of equity and debt capital and the pronounced decline in initial yields.

Europe

Here Comes Trouble, Again: Why Real Estate Is Increasingly Viewed as the Achilles

In a recent article in the Financial Times*, John Plender addresses two developments that are very relevant, and troubling, for the real estate investment industry. Firstly, financial crises have become increasingly common. Secondly, real estate is generally playing an increased role in crises over time. If real estate is recognised as a volatile asset class and increasingly is viewed as the Achilles’ heel of the financial system, a number of detrimental effects could follow, from lower investor appetite to tougher regulation.

Europe

Managers Reshuffle the Deck: Some Firms Retrench, While Others Seek to Grow Asset Base

The chaos of the financial markets’ implosion and the ensuing Great Recession has subsided, although significant uncertainty remains. Now that many economies around the world are showing slow but sustainable growth and liquidity has returned to the commercial property markets, investment managers around the globe are moving to shore up their portfolios and also take advantage of favourable buying opportunities and low interest rates.

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