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Euro property investor Belgian office accommodation, the challenges for businesses in France and why the Germans are not always more efficient

Investor's Notebook

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I have been active in the European real estate markets for over 30 years with a focus on the more liquid north-western countries. I have worked for agencies (Knight Frank and CBRE), an accountancy practice (Touche Ross) and investment banks Lazard Brothers and Citigroup.

Nearly 14 years ago I set up Rynda Property Investors as my own FCA regulated real estate investment management house. I have enjoyed working with incredibly loyal and supportive clients and very committed colleagues.

Rynda is primarily a real estate operating partner platform for global capital. Rynda actively sources real estate opportunities in Benelux, Germany, France and the UK. Our clients invest across the risk spectrum and want advice and asset management from locally based teams of committed individuals who are trusted experts in their relevant markets.

Rynda always seeks to back its judgement by co-investing with our clients.


The demise of Carillion has provoked much negative political and public reaction some justified and some wholly unjustified.

High praise is warranted by the Royal Liverpool & Broadgreen University Hospitals Trust when matters could have been so much worse. The Trustees commissioned Carillion for the construction of the New Royal Liverpool University Hospital on the basis the contractor was only paid on the handover of the completed project. Whilst the project has been delayed by over a year and currently remains uncompleted, at least the Royal Liverpool & Broadgreen University Hospitals Trust have a strong negotiation position to get the overdue work completed as soon as possible because of the favourable payment terms they achieved.

Carillion were due nearly £350m when the work was complete so there is plenty of incentive for someone to take on the contract and finally complete the project. Imagine the additional hassle and cost to the Trust if the contract had been paid by monthly instalments and completion had not been so valuable.

Let us also assume that Carillion’s board fully appreciated their business was becoming a bank as well as a contractor by taking on this contract in competitive tendering.


The amount of office accommodation converted to residential in Brussels is significant in terms of the demand-supply balance of the market. Planning approval for the change of use appears to be generally easy to achieve and the configuration of many office layouts is suited to the change.

However, counterintuitively to many UK investors it is the prime office markets that are most affected by the scale of conversions that is driving down availability of good quality well located office accommodation. In most UK locations office to residential conversions are most prevalent for B/C quality buildings in less well-located office markets. In Brussels the relative values have meant that surprisingly good quality office buildings in strong locations are being converted.

Prime residential capital values are circa €4,550 m² whilst many CBD offices have traded at similar levels as investments. Therefore, factoring in a discount for vacancy and the costs of a long lease up has meant residential conversion has been attractive for all but the very best quality offices. Recent downward shifts in Brussels office yields have moved a few more offices away from this conversion inflection point.

The rates of conversion are likely to continue to influence office supply levels unless there is a significant re-rating of residential values. The trend over time could go some way to remove the perception that Brussels is a challenging market for office investors.


President Macron has a very significant uphill battle to make France a business friendly economy. From the bureaucratic hurdles of undertaking business to the very high taxes, his challenges are myriad.

The challenges faced by businesses come in all forms of dealing with the French government with a current example being a return requesting a refund of VAT. The French authorities having acknowledged the return was submitted on time and using the correct form have so far taken over 10 months not to process it. Chasing yields a polite “it is in the system” and “it will be paid in due course”. Rumour has it that VAT refunds in Italy regularly take over a year to process.

Investor's Notebook

About Michael Walton

Michael Walton

Michael Walton founded Rynda Property Investors LLP - an independent FCA regulated real estate investment house - in September 2005. Michael is a Chartered Surveyor with over 30 years’ industry experience. His skill-sets include structuring real estate joint ventures and funds in Europe for institutional, shari’ah and high net worth investors and the subsequent deployment of capital. Rynda establishes investment products across the risk spectrum and via local teams proactively manages the assets acquired to maximise net operating incomes and investment performance. Rynda always seeks to back its judgement by co-investing with its clients. Though focusing primarily on Western Europe, Michael is also familiar with both Scandinavian and Middle Eastern markets. Prior to setting up Rynda, he was a Managing Director at Citigroup Property Investors (1998-2005) where he was responsible for all investment strategies throughout Europe. Michael has previously worked at Lazard Brothers & Co. Ltd (1994-1998) and Touche Ross (1992-1994) and holds an MBA from Cass Business School and an MA from the University of Cambridge.

Articles by Michael Walton

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