Institutional Real Estate Europe

June 1, 2023: Vol. 17, Number 6

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From the Current Issue


Green means go: With office space demand down, landlords and developers see green refurbishment as a key to survival

Despite the considerable challenges that renovation may involve, many developers are looking now to conserve what Jens Hogekamp, managing director of Becken Development in Hamburg, Germany, calls the “grey energy” locked in existing buildings. This means extending the life of properties, rather than expending the considerable carbon required in the demolition of every old building and the construction of every new one.


In demand among tenants but spurned by investors? German logistics sale prices will continue to depress as investors become more cautious about the sector — despite tenant demand remaining strong

The German economy continues to display a healthy appetite for logistics real estate. In the first three quarters of 2022, 10 percent more space was leased compared with the same period last year. And there is no sign of a slowdown in demand to date. But none of this is enough to sustain previously seen record investor interest. In the top seven cities, transaction turnover across all asset classes slumped by two-thirds in the fourth quarter of last year.


Shorter, faster, better, stronger: more flexible leases will drive up innovation, rental income and standards across every conceivable metric

Recent research conducted by The Instant Group and the Urban Land Institute (ULI) has found that both landlords and occupiers see shorter average lease lengths being the biggest change over the next five years in real estate. Of the 285 global office occupiers, landlords and third-party advisers surveyed for the report, 40 percent of respondents in Europe expect shorter average lease lengths.


Two hands are better than one: Joint ventures remain relevant for cross-border investors looking to gain entry to the German market

The practice of international investors joining forces with German investment managers and other market players is not a new trend. Since at least 2010 — when it became increasingly evident that there was a real estate boom looming on the horizon — investors from Scandinavia and Asia in particular have joined forces with German real estate experts to enter Germany’s real estate market. Towards the end of the 2010s, however, the relevance of this model had declined. But now it is coming back.


Poor sentiment on European offices is being overplayed

Negative sentiment towards Europe’s office markets is being overdone, according to AEW. In its 2023 Mid-year European Outlook report, the manager has said that opinions on the office sector remain negative in Europe primarily due to “extensive media coverage” of poorly performing US office markets, which are skewing perception.


Isn’t it ironic? Making sense of sustainability in a political world

Most, if not almost all, investment managers — prodded by their own altruistic motives as well as by the insistence of their investor clientele — have adopted sustainable development and building management policies and practices. But the work of creating sustainable built environments is never done. New challenges as well as new technologies ensure that, to be effective in the long run, any policies and practices put in place need to be as dynamic as possible to adapt to the requirements of an ever changing physical and technical environment.

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