Investment manager Aberdeen's global head of real estate, Anne Breen, spoke to CoStar News managing editor Paul Norman and sister publication Business Immo at the Mipim conference in Cannes.
She had attended Reinvest, an invitation-only summit for sovereign wealth funds, pensions and other institutional investors, as part of Mipim and said: "There were some really interesting points that came out from that session, for instance investors’ concerns over geopolitics, the influence of geopolitics on our asset class, defence spending, the extent to which that will impact interest rates, inflation, and then the relative pricing of real estate."
She added: "From a macro perspective, there was an acknowledgement, among the same investors, that real estate, particularly in Europe, has repriced, largely, and therefore it looks particularly attractive as an entry point for investors so if you have equity to invest, it is a very interesting vintage, or a very attractive vintage, to invest across a number of sectors."
Breen believes real estate now compares well in terms of pricing with other sectors, but flagged that in the coming cycle, it will be about "growing your asset and growing your income, back to fundamentals".
Describing Aberdeen as a "long-term thematic investor", she highlighted the living sector as one the company is "very focused on [...] in Europe and actually in Asia as well. And from a macro perspective, we would say the UK is an area of focus for us from a living perspective and then many other cities around Europe"
Breen is also the chair of the Association of Real Estate Funds, a membership group for UK funds. Asked about the current situation, she said the shift from defined benefit investors to a risk-off strategy was having an effect, with the resulting redemptions and liquidity requirements "stressing" some funds. Aberdeen, she said, had managed these criteria "relatively well" and had "formed an orderly exit from funds".
She suggest the sector needed innovation and had to create more opportunities for investors.
Watch the video above to hear more of Breen's thoughts on Aberdeen's strategy, the living sector and the coming cycle.