M&G Investments [Real Estate - Europe]

2017 Real Estate Top 100 ranking: 30http://www.mandg.com

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M&G Investments

Finding the opportunities in European real estate

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

What opportunities does Europe offer real estate investors?
As the recovery in Europe has gathered pace, growth is now much more widely spread across the Continent, with supportive macro tailwinds on the horizon. The US and European Union have both agreed to work towards a new economic relationship, with zero tariffs implemented across a number of sectors. We expect interest rates won’t be raised until the latter part of this year.

Against a supportive macro backdrop, our expectation is for all-property rental growth to see 2.2% p.a. over the next three years1, which should boost property values in the medium term. Demand for the highest quality assets has been strong, supporting capital values and rental growth. Our expectation is that income, rather than capital growth from further yield compression, is likely to be a key driver of future European returns.

This places the onus upon asset managers to maximise a property’s income profile and highlights the attraction of strategies that place income at the forefront of the strategy. For European long lease real estate, 70% of the value of a typical asset comprises the present value of the contracted income.

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Head Office
10 Fenchurch Avenue
United Kingdom
Laura Ladine Tel. +44 (0)20 3977 1675
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  • mand g ipe ra march april 2019

    Finding the opportunities in European real estate

    White papersTue, 5 Mar 2019

    The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

  • mandg green buildings

    Green buildings: what are the financial benefits for investors?

    White papersWed, 19 Dec 2018

    With the built environment responsible for almost 40% of energy consumption in the EU,1 real estate investors around the world are increasingly committing to more sustainable practices. Our study evidences that a portfolio of certified buildings experiences relatively higher operating expenses, but can also generate higher rental income and higher cash flows for distribution to investors.

  • mandg european long lease real estate

    European long lease real estate: a defensive alternative

    White papersMon, 26 Nov 2018

    As growth in the European economy continues to broaden out across the region, we anticipate growing demand from institutional investors to not only secure attractive income in a low-yield environment, but to protect the real value of those returns over the long term. Inflation linked assets that may help cushion returns against interest rate rises continue to attract investor interest, helping secure protection against changes in the economic climate.

  • europe real estate market outlook

    Europe Real Estate Market Outlook: October 2018

    White papersThu, 4 Oct 2018

    Economic growth in the Eurozone has softened in 2018 with trade uncertainties, but a number of macro tailwinds should support steady momentum going forward. GDP grew in Q1 and Q2 by 0.4% and 0.3% respectively, down from the 0.7% quarter-on-quarter growth seen over the second half of 2017. 

  • magnify

    Magnify: M&G European Urban Connectivity Ranking

    White papersThu, 13 Sep 2018

    Paris and Berlin, both advanced providers of urban transport infrastructure, hold onto their 1st and 2nd positions, Stockholm climbs to 3rd, and Helsinki joins the top 10

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