We know that the first quarter of 2020 displayed exceptional growth, with €7.5 billion invested in France, an increase of 46% compared to the same period last year1 and an investment record of €66.2 billion in Europe2 in commercial real estate. This was up 37% from 2019, but what does the second part of the year and 2020 as a whole have in store?
Investor interest has not waned
From the panel of participants, nearly 50% of investors have decided to continue pursuing their projects, even succeeding in establishing new records. Even though most investors have liquidity and want to proceed with their investment strategy, nearly 60% of those surveyed said that the Covid-19 crisis has had an impact on their investment strategies.
The investors surveyed also stated that they are currently paying very close attention to the profiles of occupiers selected (77%), to asset typology (62%), to the upgrading and the restructuration of their portfolio (57%).
42% of investors think that co-working is shaping up to become an asset class of its own.
International Investment Group
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Which assets are most sought after?
It comes as no surprise that investors continue to gravitate towards the most resilient asset classes by prioritising core and core + risk profiles. Nevertheless, value-add assets are still attracting a good amount of investment interest (33%). Moreover, speculative and opportunistic strategies are at 11%, up two points according to our survey.
In the short-term, 73% of those surveyed revealed that their selection process hasn’t been affected. The assets of choice appear to be: offices (24%), mixed commercial buildings, offices and accommodation (19%), logistics (18%) and business premises (18%). Offices continue to be popular but logistic assets and business premises are rapidly increasing in popularity, both of which represent 36% of investor interest. This is likely to be because these asset typologies were able to take advantage of the Covid-19 crisis by, for example, supporting supplier activities and e-commerce.
This recent study was conducted by the BNP Paribas Real Estate teams with a sample of 131 investors and/or office building owners, clients or prospects, from the 12th to the 26th of May 2020. The interviews were carried out using a questionnaire. The most represented investor category is private investors (22%), followed by family office (18%), asset and fund managers (18%), investments funds OPCI and closed funds (12%), insurance companies and banks (11%), promoters (11%) the SCPI, OPCI public and open-end funds (8%) and the sovereign funds (1%). These investors roll out their investment strategies throughout the world.