Russia continues to be of little interest to real estate investors, while those drawn to Turkey are likely to be deterred by the recent political instability, delegates at the IP Real Estate Global Awards have been told.
Speaking at a panel on global investment strategies, Richard Kolb of the CAD202bn (鈧�137bn) Canada Pension Plan Investment Board, said Russia was not of interest as an investment proposition and that he did not spend much time contemplating the Central and Eastern European (CEE) region as a whole.
Kolb, director of European real estate at the Canadian fund, instead noted that China was the 鈥渄ominant鈥� country in CPPIB鈥檚 emerging market property portfolio, although Brazil also heavily featured.
Explaining why the fund had decided to invest in the two countries, he noted that the countries would both have 鈥渁 different type of economy鈥� two decades from now.
Asked directly about the fund鈥檚 view of Russia and the CEE states, he added: 鈥淲e aren鈥檛, frankly, spending a lot of time thinking about them. We are not invested there at the moment, apart from indirect exposure through some logistics.
鈥淩ussia has never been on our list, and a lot of Central and Eastern European countries aren鈥檛 really on our list because of the lack of scale in them 鈥� perhaps the one exception to that would be Poland.鈥�
Prior to the panel, Dietrich Heidtmann, global head of investor relations and capital markets at Axa Real Estate Investment Managers, noted a further emerging market, Turkey, had likely slipped in the eyes of investors due to the political upheaval facing prime minister Recep Tayyip Erdo臒an.
鈥淰arious people were looking at Turkey, but, given the recent political instability, that really undermines the investor confidence,鈥� he said. 鈥淏ut it was definitely a market people looked at for strong demographics.鈥�
He also said recent results from KPMG鈥檚 Re-Invest survey showed that European interest was largely confined to Poland.
Kolb and Heidtmann鈥檚 view of CEE was shared by Alessandro Bronda, head of global real estate strategy at Zurich Insurance.
鈥淩ussia鈥檚 not on our list, and I agree with Richard that Poland could get onto it, but it is not on our list.鈥�
He added that the insurer could not invest in every country, and that the region was simply not within its sights.
This was not to say that emerging markets were not of interest, he said, with Bronda listing Mexico and Chile among its activities.
鈥淐hile is actually a very interesting market for us because it has been our best-performing real estate market over the last few years,鈥� Bronda said.
鈥淥ne of the reasons for Chile鈥檚 good performance is that the big investors aren鈥檛 there 鈥� so we are able to buy real estate that suits us.鈥�
