Corporate overview

BNP Paribas REIM is a full service provider covering the entire life cycle of European property investments in all European countries and sectors. With more than 50 years of experience, we provide you with sensible, long-term investments in pan-European real estate generating income and creating value. Across a range of highly diversified investment vehicles and separate account solutions.

Our expertise covers the full spectrum of real estate investment management, including all elements of strategy and solutions, invest-ment, development, asset management, structuring, risk management as well as proprietary research. Our real estate professionals blend local expertise with global practices and benefit from one of the best real estate networks throughout Europe.

Sector forecasts

OFFICE: It is difficult to predict the impact that flexible working practices will have on future office demand, but we are likely to see a fall in average floorplates required. Moreover, the evolution of the workplace is concurrent with the ESG revolution. This will be key driver for the long-term value of offices. With a myriad of approaches being adopted for the post-pandemic workplace, incorporating all aspects of ESG will be a challenge. This will further drive a wedge between demand (both occupier andi nvestor) for prime and non- prime assets, with implications for widening the rental values and yields in the office segments. Moreover, the demand for flexible and modern buildings that have a low carbon footprint will further widen the divergence.

An uptick in the vacancy rate is inescapable. The European vacancy rate is expected to continue moving up from 7.2% in 2020 to 8% in 2022 before it begins to fall back. As a result, prime rental growth for European offices will moderate over the next three years.

RESIDENTIAL: Lockdowns, health restrictions and homeworking have completely changed housing demand. Despite the continued urbanisation across Europe, demand for housing is strongest in the outskirts of large and medium cities offering improved amenities. Driven by the desire for a more modern and larger dwelling, with dedicated space for homeworking and shared spaces. These developments speak to further growth in the build-to- rent (BTR) sector over the coming year. However, housing development in the eurozone seems to have only recovered slightly from the lockdown periods of 2020 that froze the construction sector for several months.

RETAIL: Despite the acute challenges faced by the retail sector over the pandemic, there are reasons to be cautiously optimistic. Lockdowns have been synonymous with consumers shopping locally. With a large part of the population expected to continue working from home, this trend could endure with resultant permanent boost to local retail. In the wider retail sector, the situation remains fragile as restrictions begin to be eased the sector can begin to focus on adapting to the post-COVID world.

However, despite this optimism for the sector, rental values should settle significantly below their pre-pandemic highs for some markets. Prime locations are expected to suffer less from the COVID -19 impact than secondary locations, where a more notable value decline is anticipated.

LOGISTICS: The pandemic has highlighted and reinforced the existing strengths and weaknesses of the sector, with numerous border closures exposing the vulnerabilities on a global supply chain. The implications is an increased desire for a return to a more nationally or regionally oriented production (‘reshoring ’). This is increasing demand for industrial space. Moreover, e-commerce, which is still gaining momentum, remains the main driver for logistics. All this is reflected in an increasing shortage of space, rising rents and investor interest in the sector. Prime yields are likely to continue to compress further due to strong demand and the scarcity of products in prime locations.

HEALTHCARE: The strong appetite from investors for elderly care and senior living property has been clear in the recent years. The underlying economic and demographic trends driving demand from both occupiers and investors are long term and structural. The pandemic implies changes and new challenges for the real estate industry and no sector is immune. For the healthcare sector, financial headwinds from the COVID crisis are the immediate problem, as operators had to adapt quickly to ensure the health and wellbeing of residents.

The competition among investors to acquire healthcare properties has resulted in downward pressure on yields on the main European markets. Indeed, as investors are looking at healthcare real estate as a long-term strategy and a good portfolio diversifier, their allocation to this segment should rise in the coming years.

Investment principles & strategy

We consider a long-term sustainable approach focusing on yield, value creation and capital preservation, with transparent management and regular communication to our clients. Our dedicated research team enables us to have a precise market view allowing us to do scenario calculation at property and fund level. Our European investment activities focus on high-grade office buildings in economically strong locations as well as highly attractive logistics, healthcare and diversified properties, in core and value add strategies, where we integrate our ESG philosophy.

Strategic corporate development

  • truly innovative and ESG driven
  • decisively European
  • a real estate investment manager, for both institutional and retail clients.

Performance verification

The performance of our funds and assets is compiled, calculated and verified by MSCI.

COMPLIANCE STATEMENT

Within BNP Paribas REAL ESTATE INVESTMENT MANAGEMENT (REIM), we have an independent and integrated Compliance function. All compliance officers have a hierarchical reporting line into the BNPP Group Compliance function and to the CEO or the governing body. The Compliance function ensures that the company complies with the highest legal, regulatory and professional standards that apply to our business activities in order to guarantee the primacy of customers’ interests.