Europe

Investors look to alternatives, according to emerging trends report

MIPIM 2016: European developers are 37% more likely to invest in alternative assets than they were this time last year, PwC and the Urban Land Institute revealed today at MIPIM.

The results of the Emerging Trends in Real Estate report, based on a survey of 2,700 property professionals from around the world, revealed that as prime real estate becomes increasingly expensive, investors have started to focus on alternative assets with a longer-term view. The result of this trend was that 65% of respondents in Europe said they were looking at alternative assets in 2016, compared with just 28% last year.

The report also revealed that residential has shifted from being considered a peripheral to a mainstream sector in Europe.

The overarching global outlook was positive as a result of strong capital flow driven by very low interest rates and a lack of many alternative assets to real estate, said the report.

The survey also revealed that investors are taking a more granular approach, focusing on cities rather than countries and very specific sectors to make investment decisions.

Anne Kavanagh, global head of asset management and transactions, real assets, at AXA Investment Managers, said volatility was cooling the market, particularly in Europe.

She added: “There is more uncertainty in the market at the moment, and the one thing we like in the investment world is certainty. Particularly in London, with the 23 June referendum looming, investors are definitely waiting. I think this is taking the heat out if the market. Which is potentially a good thing.”

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