EPRA 2015: ADIA and Gaw Capital say that volatility in their home markets will not cause long-term risks for real estate unless the conditions remain in the long term.
Christina Gaw of Gaw Capital and Pascal Duhamel, head of European real estate investments at ADIA, speaking as part of a global investors panel at the EPRA conference in Berlin, described how capital was moving out of the Middle East and China.
Gaw said that investing in China had been made more difficult by current market conditions and that this had prompted investors to seek to diversify their capital away from the country.
She added that her company had been looking at investments in Spain and Portugal in recent months as they sought the higher yields available in the European markets.
Duhamel saw current oil prices, which are at five-year lows, as having no impact in the short term, but said “it would be wrong to say there will be no impact at all” should the low prices persist.
Whatever happens, the market needed to be prepared for a downturn, Duhamel said. To do this, he said, it needed to look to income rather than asset values to be sure of riding any down wave.
Alexander Hesse, co-head of real estate investments at Lone Star, who was also on the panel, said that other markets separate from the “western cycle” should be more closely explored.
Lone Star has begun to explore opportunities in Budapest, Hungary and Bucharest, Romania in recent months, believing that these markets offered strong growth potential owing to their lack of development and increasing rental income.
