Today, every investor is an adventurer on the lookout for signs of recovery. In the real estate sector, statistics for the 1st quarter confirm that the investment market is as erratic as ever.
Commitment volumes for commercial real estate jumped in the first three months of the year, albeit against the backdrop of a sluggish market last year. It only takes two or three major transactions - such as the Ardian-Kering deal - to turn the statistics on their head. The attrition in investment volumes seems to be lasting.
It's not so much liquidity that's lacking as products. Starting with the office, which enables capital to be deployed on a massive scale. What did the market tell us in the 1st quarter?
That, despite everything, office property remains the leading asset class for investors, with €1.4 billion committed. But that only three transactions worth over €100m were completed. That's not much for a sector that has served as the backbone of the real estate industry.
The rebound - because there will be one - is likely to remain modest. Just look at the data from across the Atlantic. Last year, according to CoStar, nearly $43 billion was invested in the United States, representing year-on-year growth of 22%. This is a far cry from the boom years - or the roaring twenties - when volumes were well in excess of $100 billion.
All the more so since, as far as allocation intentions are concerned, the office sector is not exactly back in the spotlight. Particularly among non-European investors, where only 36% still want office exposure, as revealed by the latest Inrev barometer.
They prefer "beds & sheds" strategies. Literally, "beds and sheds". In other words, residential, hospitality and logistics in all their forms. This was the gamble taken by the 300 participants in our latest edition of BIG UP when we asked them about their preferred sectors.
Real estate is plural, diverse, granular and complex. The challenge for investors who want to build a high-performance portfolio, and not just a resilient one, will be to position themselves on the winning assets. And not just switch from one fad to another just to be like your neighbor.