Institutional Real Estate Europe

October 1, 2023: Vol. 17, Number 9

From the Current Issue


Capital injection: Why overseas investors could drive a recovery in the UK market

Recent investment data show that liquidity is starting to return to the parts of the UK market believed to offer the strongest growth prospects, such as logistics and residential. The continuation of this trend, however, rests on increased capital allocation to UK real estate from international investors. Is this something we can expect to see in the near term?


Moving along: Despite tough macroeconomic times, there are still plenty of development opportunities in the industrial and logistics market

With inflation and interest rates hitting hard, many are simply refusing to guess how this will play out in the short, medium and long term for occupiers, developers and investors in industrial and logistics real estate. But, as always, there is little need for any crystal ball gazing. For the most part, the prognosis is actually fairly simple: Those who are well-capitalised, ambitious and creative still have plenty of opportunities to flourish.


Misaligned, or misunderstood? Examining misconceptions of valuers

Recent market sentiment points to growing criticism of valuers. Everyone from investors, lenders and auditors, seem to be of the view that real estate valuers are being too slow to incorporate environmental, social and governance (ESG) factors into their work. This is creating a perception of a disparity between valuations and buyer expectations, supporting the notion that valuers often fail to keep up with developing market conditions. Is there any truth to the accusations, or are valuers looked upon unfairly?


Affordable housing increasingly hard to finance in the UK

Housing associations in the United Kingdom anticipate a 22 percent reduction in the number of new affordable homes built over the short term due to increasing costs. A new study conducted by Octopus Real Estate has found that increased build and finance costs have led to a third of housing associations reporting a deficit of 11 percent to 25 percent on individual affordable housing development schemes.


AI may end up boosting most commercial real estate sectors

Concentrating on the negative substitution effects of artificial intelligence (AI) on real estate overlooks the positive “income effect” that AI could have on economies and property demand in the future. The admonition comes in a blog post published in late August by Jim Costello, chief economist at MSCI Real Assets, in which he writes that linear thinking over AI is blinding people to the new opportunities it could create for real estate investors.


Europe heading for €93b real estate debt funding gap

Europe has a €93 billion real estate debt funding gap as all-in borrowing costs reach a 20-year high. AEW says the €93 billion figure represents the shortfall between the original amount of secured commercial real estate debt originated between 2018 and 2021, and the amount available for refinance between 2023 and 2026 across all four property sectors in France, Germany, Italy, Netherlands, Spain and the UK.


Better times ahead: A more optimistic view of office markets

We have long held an optimistic view on parts of the office market. Our core argument is that extended homeworking is negative for productivity and that the concentration of wealth in cities provides evidence of the impact of in-person collaboration on wealth generation.

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