Real Estate Outlook – Europe, Edition 4 - 2021

With inflation back with a vengeance and central banks set to raise rates over the next 12 months, investors can no longer depend on the buy and hold model to deliver strong returns. Capex and sustainability requirements are going to weigh ever more heavily on NOI, but with property yields at ultra-low levels there is little buffer should a downside scenario play out. The asset class can still deliver strong returns, but managers will need to work harder to create genuine value from their real estate investments.