Time for Core European Alternatives

2024 is an attractive entry point for European alternative real estate sectors. The current market dislocation that has arisen from changing capital market conditions has led to significant repricing in the past year, providing an opportunity to acquire core, well-performing alternative assets at an attractive basis discount. 

Due to the growing maturity of alternative real estate assets, alternative portfolio composition that once relied on ground-up development of assets can now be formed by acquiring stabilised assets across selective markets. This provides a significant opportunity for investors in alternatives to drive outsized returns – particularly while there is lower competition from other investors. 

Alternative sectors such as student accommodation and Build-to-Rent (BTR), have continued to outperform commercial sectors due to recurring non-cyclical demand that has driven strong real estate fundamentals. Alternatives have maintained high occupancy and strong rental growth compared to the commercial sectors, such as offices and retail. The weaker capital markets environment has also impacted new deliveries, further strengthening the supply/demand imbalance that has underpinned this performance. Consistent performance through black-swan events over the past few years has proven alternative sectors’ ability to provide durable income for investors.

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Supporting documents

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