Interview with Adam Metz (Carlyle Group) on investment opportunities, direct vs indirect investment, lending market..

Adam Metz

Given the current mix of low interest rates and wall of cash: what is your outlook for European Real Estate over the next 12 – 24 months?

I expect the ECB’s efforts towards quantitative easing to continue to drive up asset values.  Multiple expansion, coupled with a modest improvement in fundamentals, should lead to a strong investment environment over the next 12-24 months.  Having said that, while performance of one’s existing portfolio should continue to be strong, the investment environment is highly competitive.

Which countries in Europe will provide the best investment opportunities in 2015, and why?

The UK and Germany continue to be our favored markets due to their underlying economic strength and liquidity. It’s become difficult to do deals in London, but the regions in the UK, as well as most of the major German markets, continue to offer compelling opportunities.

Direct vs indirect investing: Is there a clear advantage to either and is finding the right partners creating the most value?

Our team has historically done mostly direct deals, however, we expect to do a combination of direct and indirect deals going forward. The key is recognizing who is best equipped to execute the business plan for a particular asset – some deals may be best managed in-house while others are best managed by a local and/or specialist partner.

With bank lending still constrained, what significance does alternative lending play?

We expect alternative lenders to fill a large segment of the market vacated by the traditional lenders. Alternative lenders are willing to go higher in the capital stack than traditional lenders and are more willing to lend on transitional assets with complex business plans.  Alternative lenders are filling a major void in the market today, and we expect they will continue to do so.

On another note, whom are you looking forward to meet at GRI Europe Summit this year?

I’m excited to meet conference attendees from all walks. The most fun aspect of our business is building long-standing relationships and doing repeat business over many years.  As a relative newcomer to the European market, after 3 decades in the US market, there are lots of accomplished real estate professionals I’m looking forward to getting to know.

Join Adam at the upcoming GRI Europe Summit in Paris on 10-11 September to further discuss these topics, and more, amongst fellow investors, developers, property companies and lenders.

To see who’s participating and more topics of discussions, visit: www.globalrealestate.org/europe2015

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