The UK & European Real Estate Opportunities
In conversation with Yo-Hann Tan, CEO, BNP Paribas Real Estate, Asia-Pacific
What makes the UK & Greater London Real Estate so attractive to investors?
London has always been very attractive to the Asian investors for many reasons, especially investors from Hong Kong and Singapore, due to its Commonwealth past, the ease of language, and a clear understanding of the common law system.
London is a very liquid and deep market where doing deals is very straightforward and transparent.
This, coupled with the fact of the relatively low cost of financing in the UK markets, provides very strong returns for Asian investors.
Investors in Asia, especially those in Hong Kong and Singapore, tend to adopt a wait-and-see attitude.
Having said that, London will always be London and they remain strongly of the view that London will recover, come what may the result of Brexit, and in this regard, we continue to see strong interests of Asian investors such as the Koreans, looking for assets in London, that have strong locations, strong anchor tenants, and, with a good strong future.
These remain attractive and they continue to be traded.
What is the impact of Brexit on the UK and the European real estate markets?
Obviously, UK has caused great uncertainty in the minds of Asian investors, thinking of investing in the UK market.
This has generally caused most Asian investors to adopt a wait-and-see attitude to seek the outcome of the final Brexit vote, now expected in October 2019.
But having said that, Asian investors continue to believe in the fundamentals of the London real estate market and they continue to look for strong assets which have long income, good locations, and these continue to be traded.
With regards to Brexit on the wider European market, yes, we do see a spillage over.
We do see some capital moving away from London to the continental markets, such as Frankfurt and Paris, but, having said that, a lot of it is also due to the investors' search for yields, rather than Brexit per se alone.
Do you continue to see a strong appetite from Asian investors?
Generally, the European real estate investment market, currently, is in a very healthy position. They continue to offer good yields, good locations, long income.
The GDP stories in various countries in Europe, including France and Germany and the UK, continue to show positive results.
This is coupled with the ongoing trade war, that's going on between China and the US, and that's caused uncertainty in the Asian markets.
With these trends, we continue to see continued robust demand from Asian real estate investors into European real estate markets, specifically across all sector classes such as office, commercial, core, core plus, into alternative asset classes, such as logistics, hotels and student housing.
Asian investors continue to seek yields and we continue to see them, venture further beyond the three core markets of Frankfurt, Paris and London.
They're venturing into Poland, into the Netherlands, into Dublin, where we have seen record transaction volumes in the last 24 months, from Asian investors.
So, notwithstanding the uncertainty caused by Brexit, we at BNP Paribas Real Estate continue to believe that Asian investors will continue to invest strongly in the European real estate market in the foreseeable future.
“In Asia Pacific, real estate service offered in Hong Kong by BNP Paribas, acting through its Hong Kong branch exclusively relates to real estate properties outside Hong Kong. Specifically, BNP Paribas, acting through its Hong Kong branch is not licensed to deal with any real estate property situated in Hong Kong, and BNP Paribas, acting through is Singapore branch is not licensed to and does not offer or carry on any real estate business or services, and nothing herein should be construed as such.”
For investment professionals only. Information contained in this video is not intended to be an advertisement, a prospectus or other offering document or an offer or solicitation to buy or sell any securities or other investment. The information and opinions contained in this video are solely that of the speaker and do not represent the views of BNP Paribas. Save to the extent provided otherwise in Clause 6.5 of the Terms and Conditions applicable to your account, no BNP Paribas group company or entity shall be responsible for any loss arising, whether direct or indirect, from the use of or reliance on any part of the information and opinions contained in the presentations and workshops. You should seek advice from your own professional adviser regarding the suitability of any investments (taking into account your specific investment objectives, financial situation and particular needs) as well as the risks involved in such investments before committing to purchase or enter into any investment is made. Disclaimer