A view from the US

In September, INREV held its fifth annual North American Conference in New York, with over 125 attendees. Building on the theme ‘Europe on your doorstep,’ the conference investigated the prospects for European real estate markets and discussed where and how US investors might want to invest in the continent.

The large audience was generally positive about Europe’s potential. When polled, two-thirds said that they saw increasing opportunities for investing in the region, while overall they were less concerned about geopolitical risks than the possibility of ‘frothy pricing.’ Still, worries about Brexit remained at the forefront of the presentations, with Alexis Crow, US advisory lead for the geopolitical investing team at PwC, identifying ‘pernicious uncertainty’ in Europe surrounding Brexit as well as a ‘grave situation unfolding in the UK macroeconomically.’

Two North American investors gave somewhat different takes on Brexit. Lisa Lafave, senior portfolio manager at the Healthcare of Ontario Pension Plan (HOOPP), said that they were ‘ready to ride the wave,’ although with a desire to rebalance their European portfolio away from the UK and towards other parts of Europe. Alan Snoddy of the US-based Church Pension Fund was more positive about Brexit, suggesting that after some short-term psychological and financial pain ‘the situation will resolve.’

The audience actively engaged in a session where they heard pitches from four European regions, in order to decide ‘where to invest $1 billion.’ Johan Bergman, chief executive of Nordic-focused fund manager NIAM, and Peter Hayes, head of global research at PGIM Real Estate, were most successful in swaying opinion, as there was a significant shift toward the Nordic markets and the UK and Ireland from polls held before and after.

Comparing prospects on both sides of the Atlantic, Jim Clayton, head of investment strategy and analytics at Baring Real Estate Advisors, stressed the importance of focusing on cities rather than countries when looking at Europe. He highlighted the opportunities that existed to revitalise Europe’s ‘urban core,’ particularly as he asserted that few European cities have much modern office stock.

The conference was complemented by the fully booked North American Training Course, which covered the European regulatory landscape, fund structuring and reporting best practices in Europe. In parallel, we held an open session to discuss the work toward Global Standards, where delegates were excited about the prospect of developing a global NAV and gained insights into the first global fee ratio, which will be launched soon.

Save the date for the 2018 North American Conference and Training Course in New York on 26 and 27 September, 2018.