The “European Residential Investment Briefing” gathered experts from Germany, who presented an overview of the European residential adressing topics such as the investors profiles and main challenges and opportunities for the future. This conference organized by Real Asset Media took place on ExpoReal (Munich) - the international real estate trade fair.
Rainer Nonnengässer, Executive Chairman, International Campus, defends that “the majority of the residential rental markets in Europe are dysfunctional, meaning that there is a way higher demand than supply”. Alongside with this, “the rents have been rising sharply and we are assisting to demographic shifts - young people are desperate to leave their homes after being stuck for 18 months, booking reservations are exploding, business travel is kicking off”, and so on.
Rainer also commented that regarding the investors profiles Institutional investors stand out, mainly because “they lacked of other opportunities…Offices and Retail were big question marks, logistics seen its prices growing rapidly, and even though it may not be so sexy, it is seen as a stable asset class”.
“Equity pockets” increased competition and price standards in the market
Dr. Clemens Paschke, CEO, Ziegert EverEstate GmbH, believes that “we are almost on a FOMO (Fear of Missing Out) effect phase”. The price sensitivity is lower than before, what keeps pushing the market forward.
On the other hand, on the development side “equity pockets” who typically invested in hotels and offices 10 years ago, have now joined the residential market and are contributing to increased competition and price standards, stated Rainer Nonnengässer.
Manuel Böcher, Managing Director - Head of Transaction International, Swiss Life Asset Managers, agreed and defended that everybody is looking for the same thing. But the truth is that “it is quite hard to find residential opportunities which are already in place” or near complete. And as Manuel Böcher explained, buying developments from “scratch” brings problems to the funds because they need stable income…otherwise “they are blocking the money for other purchases, funding, and so on”.