Heard on the road: office pricing, retail gossip and Belgium (not just for the beer) – The Property Chronicle
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Heard on the road: office pricing, retail gossip and Belgium (not just for the beer)

Investor's Notebook

What do investors want right now? What are their preferred opportunities, and what do you need to know about them? This series sums up what one investment adviser has gathered from roadshows, conferences and meetings across Europe.

Heard in Paris during a conference by the CEO of a leading global property asset manager: “The current 2.5% to 3% pricing for prime offices does not work for us. For this part of the market, we will do development and value-added acquisition but no core strategies for core offices” – a remark that confirmed this CEO’s reputation as having a blunt, straightforward personality. In front of a large real estate audience, the point was made clear: most of the classic investors (funds, asset managers and listed property companies) are not involved in prime offices. This market is instead driven by a small group of pension funds and insurance companies and also by some families. In this context, for core strategies, the asset managers’ preferred sectors for 2020 are likely to remain industrial, alternative and residential, not offices.

Heard during MAPIC in Cannes, where the retail property industry gets together in November: “Are you aware that company A is preparing a mega portfolio disposal?” … “I have learnt that the 2019 published footfall is going to be the highest growth rate of the last ten years” …

“Company B will not launch its landmark shopping centre development – I have been told” … “Company C has no other choice than a highly discounted rights issue and it is going to hurt.”

I will be able to quote much more of such retail-related gossip, as I am finding that many investors, advisers and brokers are now sharing with me gossip as well as facts. In my view, this is due to the high level of uncertainty in the asset class as well as, to a certain extent, a spirit of revenge. 

Investor's Notebook

About Philippe Le Trung

Philippe Le Trung’s investment and advisory boutique firm specialises in real estate securities and has a strategic partnership with one of Europe’s major family offices.

Articles by Philippe Le Trung

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