Ms. Arnold, what has changed for real estate investors in recent years?
The time when falling yields and rising market prices delivered a significant part of the performance without further action is over. In the meantime, valuations have largely stabilised again, but for the most part are still far from the records of the time. Investors remain selective. Today, real estate needs to generate more income from ongoing operations and active management. As a result, location quality, usage concept and asset management are gaining considerable importance. Value increase by waiting no longer works.
Where do you currently see particularly interesting opportunities?
Within the real estate asset class, specialised housing forms are an interesting area. The need for living space is high, but the requirements are also more differentiated. Micro Living, Serviced Apartments or Senior Living address different life phases and user groups. In each case, it is crucial that the location, target group and operator concept fit together. The importance of operational competence is particularly evident in these special segments: A building alone does not make a successful living concept. Beyond the real estate asset class, infrastructure and renewables are also two important topics for us, where, by the way, operations have always been much more in focus than purely increasing value.
And what about office properties?
The office market is currently highly polarised. Modern space in central locations continues to be in high demand on the rental market, which is now also reflected in the prices. Older stocks in weaker locations, on the other hand, are increasingly under pressure. Opportunities therefore arise in particular where it is possible to start earlier in the value chain - for example in the case of revitalisation or suitable reuse. The prerequisites are a good location, a solid usage concept and partners who can implement such projects technically and economically. It’s too short to go all-in on or against the office.
What exactly does active asset management mean today?
It starts with rental, but goes much further. Technical measures, ESG requirements, financing, operator control and the positioning of the property must be continuously reviewed throughout the entire holding period and adapted or implemented if necessary. This approach is not limited to real estate. In infrastructure and renewables, too, it is increasingly important to look at individual assets in context. A recent example is the fund management for Pangaea Life Blue Energy, which we are allowed to take over at the turn of the year: In addition to wind, solar and hydropower, storage, grids and other energy-related infrastructure will also be taken into account more closely in the future. Actively managing these contexts is becoming increasingly important for long-term investment success.