When spending your money is the challenge
February 13, 2015
Nice place to be right? In our latest ‘Emerging Trends in Real Estate - Europe 2015’ survey of senior industry figures, over 70% expect more equity and debt to flow into their markets in 2015.
Or maybe not when the availability of assets is getting worse especially when 61% think prime assets are overpriced anyway. A whopping 82% saw a shortage of suitable assets to acquire as an issue impacting their business in 2015.
We have a frothy market. Journalists are circling asking when the property will bubble burst. Actually I am not sure it is as dramatic as that. Real estate will always be cyclical and yes we may be due an adjustment but leverage is modest and interest rates are low and staying there for the foreseeable future.
Sophisticated investors are moving up the risk curve and investing into secondary markets and development projects. Birmingham came ahead of London as an investment prospect. Money is now moving around Europe in a predictable chase for yield.
So opportunities in 2015 are more likely to be around platform creation, scale roll-ups and smart asset re-positioning. And always remember the basics - keep an eye on leverage.
Thinking about investments in real estate? Share your thoughts on the market in the comments box below or schedule a meeting to discuss your situation in confidence.
