Talking about investments in Europe it should not be regarded as a homogeneous market for investments. Each country has its own specific character. Alongside with that, such economic and political alliance as the European Union being established, mainly, for the purpose of economic integration, has advantageous instruments for settlement of difficulties occurring in particular countries.
Over the years of its existence, this institution has more than once demonstrated its resources and capabilities. Notwithstanding the situation with Greece, Scotland, and Russia, we do not see system risks capable of radical changing the existing situation in the European market in the mid- and long-term with high probability. Our company has been functioning in substantially less stable market of Russia for the last 20 years, and performance figures of our projects witness the ability of being successful even in such conditions.
There is also the end of the loose money looming. How does that eventuality impact your investment strategy?
Development in the property market – is a risk always. That is why every investor finds a niche and a market for himself meeting his ideas about income and risk ratio. Our portfolio is based on core and core+ projects; at the same time, in the European market we review and implement opportunistic projects, because such projects in particular let us approach the market and be conscious of processes occurring inside it.
Only a few see a property bubble in Europe? Where do you stand?
Let’s take London market, for example. For several years already we can hear about the last frontier after which the “bubble” will burst, but nothing happens. To a greater degree, such events depend on a number of macroeconomic factors and if they are stable – do not wait for catastrophe.
UK and Germany are investment magnets. Which other markets hold the best opportunities at the moment in your view?
Some cities in markets of Austria and Spain offer opportunities for opportunistic projects with the annual earning power approximately 20%.
Exit Strategies, Raising funds, identifying product, finding the right partners – What is your biggest challenge?
Sufficient deal of interest should be paid to each such category in any project in any market, and then the project will turn out to be successful. We think that in the real property, alongside with a famous axiomatic statement “location, location and location”, there is another equally important face of success: correct product concept. Combining these two factors all other tasks will be settled much easier.
Join Gagik 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.