There has been much talk in recent years about the “Japanification” of Europe. The continent is experiencing an extended low-growth, low-inflation and low-interest environment, which is often compared to Japan’s economy during the early 1990s. But is it a fair comparison, are there lessons to be learned, and what does it mean for real estate?
From the Current Issue
From the widespread donning of masks, to our approach to buying dried pasta and toilet paper, much has changed since the coronavirus pandemic first made headlines at the beginning of the year.
Core real estate has always been a fluid concept. In the not-so-distant past, a large office building in a prime central business district with a single tenant would have been most investors’ definition of a perfect core asset. Today, the ideal office property is a multitenanted one that can be quickly reconfigured to match tenant or mixed-use needs.
The wholesale shift to home working triggered by the COVID-19 shutdown has understandably led to questions regarding the future of the office.
Mack Real Estate Finance (MREF) and its co-investment vehicles have raised a total of €754 million of capital for opportunistic credit, mezzanine lending, preferred equity and special situations in the global commercial real estate sector.
€515 million was invested in European senior housing assets in the first half of 2020 — a year-on-year increase of 25 percent.
Grocery retail analyst IGD has said that the UK’s food and grocery market is set to grow by 10 percent over the next three years.
Mid-market commercial property transactions have dropped by more than 50 percent, creating liquidity concerns for Europe’s real estate market.
The recovery from the COVID-19 crisis will place a greater onus on real asset impact investing as capital allocators look for consistent returns that serve “the most fundamental needs of society”.
Benjamin Disraeli, who twice served as Prime Minister of the UK in the 19th century, once said that “London is a roost for every bird”. Indeed, the city has been home to some of the world’s largest banks and businesses, and a hub of economic activity, for centuries. But, as the dust of the lockdown settles and many workers begin a phased return to city offices, does Disraeli’s statement still ring true? Have London offices retained their appeal to both tenant and investor?
One of the ways in which we’ve been serving this mission has been to organise and host face-to-face events, such as our Editorial Advisory Board meetings and our VIP conferences. Those obviously have had to be put on hold. But that doesn’t mean we haven’t been busy.