Tobias Huzarski (KKR Kohlberg Kravis Roberts), Frank Müller (Corpus Sireo), David Poremba (Eastdil Secured) and Dr Jens Ortmanns (McDermott) hosted MuMAC’s first real estate panel and discussed current trends in the European real estate private equity market.
As panel head, Dr Ortmanns started the discussion by highlighting the diversity of real estate as an asset class and the broad range of market participants in Europe, including private equity funds, hedge funds, pension funds, insurers, and other national and international institutional investors (recently including many Asian buyers), as well as family offices, developers and high-net-worth individuals. Mr Huzarski initiated a lively discussion about the role real estate plays for private equity funds as part of their overall investment strategy and portfolio allocation. The panel agreed that real estate can still be considered a safe haven and a hedge against other more volatile asset classes in the investment landscape. Senior debt funding generally is available at all-time-low interest rates, and the pricing of real estate deals is high but still interesting, particularly when it comes to opportunistic and value-add investments.
Mr Müller continued the discussion by giving some background on Swiss Life’s real estate investment strategy across Europe with a particular focus on Germany and France. Corpus Sireo acts as Swiss Life’s German platform for real estate investments, asset management and real estate services. The panel agreed that Germany, followed by France and the United Kingdom, currently is the most relevant market for real estate investments in Europe. Dr Ortmanns quoted PwC’s recent “Emerging Trends in Real Estate” survey, which placed Berlin, Munich and Frankfurt among the 10 most active real estate markets in Europe.
Mr Poremba provided an overview of equity and debt sources in the current market environment, and further explained the different investment types ranging from core, core plus, and value add to opportunistic. Mr Müller contributed a review of the most relevant asset classes, including residential, office and retail, as well as special asset classes such as logistic, hotels, health care, data centre and others.
Regardless of specific investment strategies and asset allocations, all panellists emphasised that geopolitical implications will play a significant role for investments in the real estate sector going forward.