Identifying opportunity and creating value in a turbulent European real estate market

The European real estate market continues to recalibrate in the face of elevated interest rates, declining valuations, and economic uncertainty. Apollo is navigating this with a thematic focus, grounded in data-driven analysis and a flexible approach to tactical deployment. Here, we discuss how we’re currently engaging with the opportunities and challenges posed by the current market environment.

How is Apollo approaching the market today? 

Apollo believes in the versatility of investments across market cycles. Real estate has benefitted from a supportive rate environment and positive macro tailwinds that were, historically, highly unusual. Now, with normalised debt costs and increased volatility, the relative value of European CRE as a fixed income replacement has changed. We continue to seek to identify and execute strategies with potential for attractive risk adjusted returns. 

As an active manager, we seek substantially stabilised assets with embedded value creation levers. Owing to the nature of our Core+ capital – we have a longer duration bias with tactical flexibility supported by regular (re)appraisal of our investment thesis against the changing macro environment. We approach deployment with a detailed sectoral thesis that we believe is underpinned by deep macro-and market-level analyses. 

We avoid “reversion to the mean” thinking, recognising enduring shifts in space utilisation. Leveraging our expertise can position us to capitalise on opportunities created by today’s market dislocation.

You can now read the full whitepaper at the link below

Supporting documents

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