Last year had all the attributes of another mediocre year for European real estate; transaction volume running negative as compared to the year before. Then, in the fourth quarter, trading activity billowed like an early winter storm slamming into northern Europe. Much of the dealmaking came from foreign investors. The big question is why? After subsequent years of post-recession blues, the euro crisis and depression (not recession) in specific southern European countries, why would foreign investors come to Europe? Was it for the long-term prospects of European industry and society?
From the Current Issue
Sociological evolution and economic downturn have dramatically changed the dynamics between landlords and tenants. Three revolutions are currently on the go: technological, environmental and generational. These key elements are driving tenants to change their philosophy as office occupiers. Not only do tenants require high-quality real estate, they are also looking for economic efficiency and these days that means energy efficiency. How can these differing objectives be reconciled? Can this conundrum be solved or is this the end of what used to be a love story?
Today, the phrase “emerging market” is almost synonymous with the acronym “BRIC”. The economies of Brazil, Russia, India and China have grown substantially during the past decade from the standpoints of GDP and investment. There is no question that it is still possible to invest successfully in the BRIC countries. Some would argue, however, that cracks are beginning to emerge in the BRIC facade, as these countries have been focal points for investment for almost a decade. Is there another country where superior risk-adjusted opportunities are available? The answer is Turkey.
The global financial crisis had profound implications for real estate, with trillions of dollars being wiped off the asset class and serious questions being raised as to the credibility of real estate as a significant element of institutional portfolios. Since that time, most real estate markets have experienced a recovery and, unlike other crises such as the early 1990s or the 1970s, investors have continued to demand exposure to the asset class. Despite this recovery, it is clear that one of the most significant long-term implications of the crisis is for stronger risk management of the real estate investment process.
Editor Richard Fleming spoke recently with Tim Hodgson, head of the Thinking Ahead Group, about the group’s latest project, complexity, and what it all could mean for the real estate sector.
The German government was not merely content to revise and amend the current laws in order to implement the AIFMD. In fact, the German government decided to take the opportunity to unify its investment laws and to undertake a wholesale overhaul. In drafting the KAGB, the German legislators in certain aspects went beyond the minimum requirements set forth in the AIFMD. In this article, we would like to address some of these excessive and other aspects of the KAGB that may be of interest to non-EU alternative investment fund managers who wish to enter the German market in search of potential investors for their non-EU alternative investment funds.
We’ve been talking about the impacts of pending restrictions on financial companies for what seems like decades now. And when I say talking, I mean speculating, because none have been implemented yet, so we’re all just guessing at what effects they will have — singularly and in total. But for all the angst they have caused, you have to wonder if some ever will be finalised. Solvency II has been pushed off to 2016, and Basel III will not see the light of day until 2019. If we can keep kicking these down the road, many of the executives in charge of investments when the crisis began will be able to retire before facing restraints on their investment strategies.
Investors could be active investors in hotels in 2013. According to Savills, the hotel sector will have stronger investment volumes this year, especially in the United Kingdom and the United States.
Analysis published recently by Real Capital Analytics of deal flows suggests that Europe is only just starting to make progress with its distressed real estate loans. This is in marked contrast to the United States, where it is estimated that 58 percent of the $394 billion (€307 billion) of mortgages that hit trouble have now been resolved.
Sovereign wealth funds have been snapping up international headlines — and real estate — as the state funds make a deliberate move into the commercial property sector. Sovereign wealth fund assets will increase by 60 percent before 2016, according to UBS Global Asset Management, a force guaranteed to shift the foundations of the global property market as more capital is flooding into gateway cities.
European fundraising remains active as investors continue to commit equity to new and existing funds.
Investors and developers across the United Kingdom and continental Europe are taking advantage of the increased demand for student accommodation, as evidenced by the accelerating transaction activity in the sector. Generally, more students are going into higher education, largely as a result of the poor jobs market for school leavers, and more students are choosing to move away from their home town and require somewhere to live.
Following a robust 2011, economic growth in Slovenia slowed and pushed the country into recession in 2013, closely linked to falls in domestic demand. A return to modest positive growth is not expected until 2014, as subdued external demand and austerity measures will hamper growth this year. The occupational market remains weak as a result and a recovery is not on the immediate horizon. This is affecting performance across all sectors of commercial real estate.