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- Research and Market information
- Professional Standards
- Public Affairs
- Communication & Events
- Training & Education
Real Estate Investment in Europe Jeff Rupp Director of Public - - PowerPoint PPT Presentation
Real Estate Investment in Europe Jeff Rupp Director of Public - - PowerPoint PPT Presentation
Real Estate Investment in Europe Jeff Rupp Director of Public Affairs Square de Mees 23 Brussels INREV Research and Market information Professional Standards Public Affairs Communication & Events Training &
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5,017 7,535 7,166 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Real Estate Government Bonds Equity
€ Trillion
SOURCE: Paul Mitchell Real Estate Consultancy
European Institutional Investments
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- Pension Funds
- Insurance Companies
- Investment Banks
- Sovereign Wealth Funds
Institutional Investors
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- Direct Investment
- Indirect Investment
Listed Real Estate Investment Funds Non-Listed Real Estate Investment Funds
Institutional Investors’ Real Estate Portfolios
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- Long-term investments
- Lower volatility
- Counter-cyclical
- Inflation hedge
- Income generation
- Opportunity to implement ESG policies
Perceived Advantages of Real Estate as an Investment Class
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Distribution of real estate investments by sector
36% 35% 9% 9% 11% Offices Retail Residential Industrial Hotel, Leisure, healthcare, etc.
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- Job creation:
- construction
- management
- maintenance and renovation
- supply
- finance and legal
- other
- GPD growth
- Social cohesion
Role of real estate investment in:
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- Challenging to obtain adequate return on capital
- Regulatory initiatives:
- Designed to reduce systemic risk in financial markets and
protect investors
- However, Solvency II, AIFMD and EMIR will
require higher capital reserves and/or will increase the costs associated with investing in real estate
Current Investment Environment
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- Unknown, especially taken together
- What we do know - Regulatory impact assessments fail
to take adequate account of the regulations’ impact on job creation, GPD growth and social effects
Impact of wave of new regulations - Solvency II, AIFMD and EMIR
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Lower returns could make real estate a less attractive investment class Less investment Ripple effect through the European economy
Caution!
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- Understand the impact of regulations before
they are adopted, not after
- Engage in a careful cost-benefit analysis – do
the benefits of the proposed regulations really
- utweigh the costs, especially at a time when
growth is needed to pull Europe out of the economic and financial malaise?
A modest proposal for European regulators
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- One thing is clear, capital can deployed globally.
Asian and other developing markets, as well as developed markets in North America, are hungry for investment and offer attractive rates of return
- Job creation and GDP growth in Europe partially