There is also the end of the lose money looming. How does that eventuality impact your investment strategy?
We believe that QE in Europe still has some time to run, and that the current events actually prolong it. In the US, people have consistently underestimated the power, and time aspect of QE. Having said this, we have calibrated our investment strategy to focus on niches which have not (ye) been over-bought, feature strong tenants from the “real” economy and which are therefore well protected.
Only a few see a property bubble in Europe? Where do you stand?
There are certain submarkets and asset classes where price appreciation has been unprecedented, and where capital values are now at historical heights. In some cases, that is justified by paradigm shifts (witness the rise of prime retail in global gateway cities), but other rallies look unsustainable. Our core skill is to choose and pick the right corners and execute smart transactions, even if these might appear contrarian at first notice.
UK and Germany are investment magnets. Which other markets hold the best opportunities at the moment in your view?
At Macquarie, we are generally excited about CEE, with Poland, Czeck and Slovakia showing fantastic fundamentals and convergence potential. Italy is another, fundamentally healthy market with great potential.
Exit Strategies, Raising funds, identifying product, finding the right partners – What is your biggest challenge?
Finding the right deal in the right niche at the right time – capital and partners are plentiful at present.