12 October 2017
London
Reporter: Theo Andrew

Investors eye hotel and office sectors, says BrickVest survey


Hotel and office sectors will provide the biggest real estate investment opportunities over the next 12 months, according to research by Brickvest.

The research, which surveyed 99 institutional investors, found that 34 percent thought the hospitality industry would deliver the biggest opportunities, while the same figure favoured the office sector.

The news emerged as Patrizia Immobilien was chosen by a German pension fund to build and manage a €200 million pan-European real estate portfolio targeting office, hotel and residential assets.

In addition, Henderson Park recently purchased two Hilton Metropoles in the UK for £500 million.

The industrial sector was a close third with 31 percent of investors opting for big box, while 19 percent thought retail and leisure would provide the most opportunity.

Despite this, Emmanuel Lumineau, CEO at BrickVest suggested that Brexit will have a knock-on effect on the European office sector.

Lumineau said: “We expect to see the highest level of volatility from the office sector as many international firms currently headquartered in the UK may put decisions on hold over their long-term office space requirements.”

“If the UK no longer gives businesses access to the European market, they may need to spread their staff across multiple locations to more efficiently access both the UK and European market.”

Notably, 44 percent of investors expect commercial property yields to increase over the next 12 months, with just 22 percent expecting them to decrease.

A lack of liquidity was found to be the biggest challenge facing institutional investors investing into commercial real estate, with 58 percent highlighting the issue.

Other issues highlighted in the research included regulatory and compliance reporting costs at 36 percent, lack of viable projects at 33 percent and inefficient processes at 22 percent.

The research showed that the two most popular routes of access into the commercial real estate market were property funds at 49 percent and REITs at 30 percent.

Lumineau added: “Through our online investment platform we continue to see rising demand for high quality commercial real estate, especially in the form of debt like investment opportunities which offer good risk adjusted returns in a volatile market environment.”

More news
The latest news from Real Estate Investment Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
BMO adds nine assets to UK portfolio
23 October 2017 | London | Reporter: Theo Andrew
The properties are spread across the office (35.9 percent), industrial (34.5 percent), retail warehousing (22.5 percent) and retail sectors (7.1 percent), reflecting an initial yield of 4.8 percent
Kennedy Wilson Holdings completes $8 billion merger with European arm
20 October 2017 | California | Reporter: Theo Andrew
The $1.98 billion (£1.5 billion) deal equated to an offer of $15.49 (£11.74) per KWE share, a 20 percent premium on the $12.91 (£9.79) per share closing price on 21 April
Aviva acquires Bristol redevelopment
20 October 2017 | Bristol | Reporter: Becky Butcher
Aviva Investors has purchased the first phase of a redevelopment business park in Bristol for £30 million
Coyote names Rob Bould as non-executive director
19 October 2017 | London | Reporter: Theo Andrew
Rob Bould, who has 40 years of real estate experience, will help grow the data platform, which will track, manage and report the performance of real estate assets in real-time
Hammerson expands flagship Parisian shopping centre
19 October 2017 | Paris | Reporter: Theo Andrew
The 11,000-square metre property adjoins its Les Trois Fontaines centre, the firm’s recently refurbished flagship asset in Paris
SELF II reaches €500 million on third close
19 October 2017 | Paris | Reporter: Theo Andrew
The pan-European debt fund achieved the equity through institutional investors from France, Germany and Italy
Encore+ adds Dutch office for €50 million
18 October 2017 | Eindhoven | Reporter: Theo Andrew
The the pan-European open ended core-plus fund is co-managed by Aviva Investors and LaSalle IM, as fund manager and asset and transition manager, respectively