Real estate is widely recognised as offering a unique combination of equity and bond-like properties. The bond-like attributes of real estate stem from the steady income streams generated by contractual cash flows, primarily derived from lease obligations; simultaneously, their equity-like returns are driven by the long-term appreciation of asset values. As a result, real estate has continued to receive consistent allocations in European portfolios despite the uncertain and volatile economic backdrop, as investors seek to benefit from its diversifying properties.
Listed real estate investments offer investors flexibility of access in a manner similar to equities, allowing for quick buying and selling with almost instantaneous execution. Consequently, listed real estate investments tend to experience greater price fluctuations than the underlying direct real estate assets, as the market reacts to new information and developments while also being influenced by broader equity market sentiment.
Similar to other equities, pricing of listed real estate is generally based on forward-looking prospects, such as anticipated new leasing agreements or investment transactions. In contrast, direct real estate transactions proceed at a much slower pace and often involve thorough due diligence across multiple stages. Moreover, values of direct real estate assets are assessed relatively infrequently, and appraisals are often retrospective.
The Iberian REIT & Listed Conference, taking place on the 6th of February in Madrid, will bring together Iberia's leaders in listed real estate and specialized analysts to discuss real estate as the long-term investment with the best risk-adjusted return, showcasing the opportunities of inflation hedge for major institutional investors. As of September 2024, the total listed real estate in Iberia adds up to 32,27 billion dollars, according to EPRA research.
There is in fact a fairly strong correlation between direct and listed real estate, albeit operating with a time lag. This implies that pricing of listed real estate may provide some insight into the future direction of direct real estate returns and potentially offer relative value opportunities, notwithstanding the tendency for equity markets to overreact to incoming information.
Attend the most important event in Iberia for the listed real estate sector and will you be part of the discussion of a highly regulated and transparent tool to promote long-term investment! The flagship listed real estate conference in Iberia will celebrate its 7th edition in LOOM Azca, one of the largest and most exclusive event venues in the heart of Madrid, powered by Merlin Properties.