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 60 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, investment, 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
INDUSTRIAL: The expected increase of online retail sales and the new trend regarding re- and near- shoring should drive demand for logistics space over the next ten years. In most European countries, the vacancy rate is below 5% and the risk of oversupply remains limited. The current economic and geopolitical environment should maintain a low level of space availability with land shortages, high construction costs and inflationary uncertainties in financing projects. This will continue to put upward pressures on rents. Given tightening financing conditions, we believe that yields are likely to rise in the short term, even if we see further solid rental growth going forward.
OFFICE: The prime segment is undoubtedly the most resilient, although the market will continue to polarise by quality. Companies are now focusing more on locations with good connectivity and amenities. As a result, vacancy in central locations should remain low – implying stronger rental growth – while secondary locations are likely to suffer. Moreover, investment has entered a period of price correction due to tightening financing conditions. There is no doubt that yields will recalibrate, but prime assets should quickly become attractive again once repricing is complete.
RESIDENTIAL: Given its lower correlation with business cycles, the momentum for the residential sector is good. Unlike house prices, which are coming under pressure from increasing mortgage rates, we expect rental values to increase at a faster pace, as demand shifts to renting from buying. This should bode well for build-to-rent investors in terms of both occupational demand, although it is not immune from repricing values due to higher interest rates. The sector also faces regulatory challenges in most regions, which could intensify on the back of the cost of living crisis.
RETAIL: High street prime locations remain attractive, if they benefit from a significant return of tourists. Prime rental values in most locations could fall further amidst the cost of living crisis. Given relatively high yields and their resilience since the pandemic, Retail Parks should continue to attract investors. Overall, investors must accept that capital appreciation will be limited in the short term, making retail well suited to an income investor.
OTHER: Healthcare continues to be one of our preferred sectors over the long term. Investment appetite is still healthy, with healthcare generating a good yield, along with stable, indexed rents based on long rental contracts. Fundamental drivers are very positive, and the sector has the ability to diversify portfolios, as it can be resilient to economic downturns. Combining some additional yield declines in the outer years of a hold period with expected rental growth, healthcare assets are likely to generate strong returns in the medium to long term.
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
BNP Paribas REIM is:
- Truly innovative and ESG driven
- Decisively European
- Qui peuA real estate investment manager, for both institutional and retail clients
Performance verification
The performance of most of our funds and assets is compiled, calculated and verified by MSCI.
COMPLIANCE STATEMENT
BNP Paribas Real Estate is committed to conducting our business in compliance with all laws and regulations in accordance with the highest principles of ethics.
Therefore, it has developed policies and procedures describing the steps all employees must take to be compliant across different areas of risk when conducting our business.
We have constantly reviewed its internal risk assessment, taking the rapidly changing environment surrounding us into due consideration, and placed appropriate “remedial action” and “preventive measurements.”
It has been the unchanged strategy of ours that strict compliance control shall be of importance to meet the high expectation of professional investors. Like our strategy applicable for risk management, rapidly-and-dramatically-changing world has obliged us to review the compliance policy regularly and deliberately.
