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03. Februar 2012 
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European institutional investors will remain risk averse in 2012
Invesco Real Estate (IRE) believes that European institutional investors, in general, will remain risk averse in 2012 and continue to focus on a narrow definition of prime assets, with investors expected to accept more risk during early 2013. Simon Mallinson, European Research Director, Invesco Real Estate, gives an overview of what IRE anticipates investors will focus on in 2012:
Avoiding weaker eurozone markets
“We anticipate a focus on markets outside the immediate, short-term volatility of the eurozone and currency concerns. While no European market is protected entirely from the volatility we would expect the UK, Sweden and Poland to show stronger relative performance.”
Domestic strength is key
“Markets such as the UK, Sweden, Poland and France are economies where the domestic market is a strong driver of GDP growth. We expect domestic drivers to out-weigh international drivers in the short term.”
Markets which offer liquidity through attracting a broad range of capital sources
“Markets in which international capital is the only source of investment are expected to continue to be out of favour (such as Hungary and Bulgaria), while markets that offer a broad base of domestic and international pension, insurance, sovereign wealth and other investors should remain more liquid
Key gateway centres
“National economic difficulties do not necessarily translate to problems in key domestic markets, particularly those with a global focus. Office markets in supply constrained key gateway markets, where occupier demand has been holding up, can offer attractive lease terms let to strong tenants.”
All sectors can offer attractive risk-adjusted income
“However, liquidity is better in the office and retail markets. We continue to expect retail to be the strongest performer over our five-year forecast period, but with out-performance weighted to the second half of this period.”
“A key concern for risk averse investors is liquidity. Recent experience indicates that a growing criterion for maintaining asset liquidity is “green” or sustainable accreditation. Investors are expected to continue focusing on green ratings to maximise asset liquidity.” Simon Mallinson concludes: “We foresee that institutional investors will continue to be focused on short-term income return in 2012 with total return increasing in importance from 2013 onwards.”
Avoiding weaker eurozone markets
“We anticipate a focus on markets outside the immediate, short-term volatility of the eurozone and currency concerns. While no European market is protected entirely from the volatility we would expect the UK, Sweden and Poland to show stronger relative performance.”
Domestic strength is key
“Markets such as the UK, Sweden, Poland and France are economies where the domestic market is a strong driver of GDP growth. We expect domestic drivers to out-weigh international drivers in the short term.”
Markets which offer liquidity through attracting a broad range of capital sources
“Markets in which international capital is the only source of investment are expected to continue to be out of favour (such as Hungary and Bulgaria), while markets that offer a broad base of domestic and international pension, insurance, sovereign wealth and other investors should remain more liquid
Key gateway centres
“National economic difficulties do not necessarily translate to problems in key domestic markets, particularly those with a global focus. Office markets in supply constrained key gateway markets, where occupier demand has been holding up, can offer attractive lease terms let to strong tenants.”
All sectors can offer attractive risk-adjusted income
“However, liquidity is better in the office and retail markets. We continue to expect retail to be the strongest performer over our five-year forecast period, but with out-performance weighted to the second half of this period.”
“A key concern for risk averse investors is liquidity. Recent experience indicates that a growing criterion for maintaining asset liquidity is “green” or sustainable accreditation. Investors are expected to continue focusing on green ratings to maximise asset liquidity.” Simon Mallinson concludes: “We foresee that institutional investors will continue to be focused on short-term income return in 2012 with total return increasing in importance from 2013 onwards.”
