Persistently high interest rates and the resulting fall in market values are 鈥榮till a big issue鈥� for the European real estate investor, according to Gerhard Lehner, head of Germany at Savills Investment Management.
鈥楾hey affect all asset classes, but to different degrees,鈥� he explained, adding: 鈥榃hile the risk/return profile in the logistics sector is currently very attractive and there are also attractive investment opportunities at adjusted prices in the residential and food retail sectors, we see a 鈥渇light to quality鈥� in the office sector.鈥�
Here, 鈥榥ew forms of work require modern office inventory and strategic asset management as well as selective investment strategies鈥�, he suggested. 鈥楾he key criteria in this area are flexibility and user orientation. Good accessibility is extremely important, but so is the recreational quality in and outside the office.鈥�
Looking forward, Lehner said that 鈥榯he question of how investor behaviour will develop鈥� remained a matter for 鈥榗oncern鈥�. He said: 鈥榃e have observed great reluctance among investors to make new investments over the last 18 to 24 months. But there are some who see the current developments as an opportunity and benefit from attractive investment opportunities.鈥�
Lehner suggested, however, that investors were likely to return to the market before too long. 鈥業nstitutional investors, such as pension funds or insurance companies, have an ongoing need for investment opportunities that offer long-term, stable returns,鈥� he said.
鈥楾here are exciting investment opportunities emerging - particularly in sectors with solid long-term fundamentals and sustainable rental growth, and in properties that fulfil user requirements and ESG criteria.
鈥榃e see attractive investment opportunities at adjusted prices in the residential and logistics sectors and also in the food retail and real estate debt sector. In addition, top offices in central locations in European capitals remain attractive.鈥�
