EUROPE - Most investors polled at the IP Real Estate Investor Forum believe now is the time to take advantage of real estate opportunities created by the ongoing crisis in the euro-zone.

When asked what action investors should take in light of the euro-zone crisis over the short to medium term, nearly 80% of respondents - comprising pension funds and asset managers - agreed it was the right moment to increase exposure to the real estate market in the region.

By comparison, only 21% of respondents preferred to reduce their exposure.

Michael Nielsen, managing partner at the DKK754bn (€101.5bn) Danish pension fund ATP, fell into the more cautious camp, arguing that the worst-case scenario for euro-zone investors was precisely the situation in which they found themselves.

"The situation in Europe is unlikely to become worse than it currently is," he said. "That is precisely the reason why we have decided that, in terms of real estate investments, we will not continue in this region until we have more clarity on the future of the euro-zone."

Matthew Ryall, head of indirect investment at Allianz Real Estate, and Larry Antonatos, director and product manager of global equities at Brookfield Investment Management, both echoed those thoughts and stressed that uncertainty in the market remained one of the main barriers to investing, and that European governments should tackle the Greek problem immediately.

"In the worst-case scenario, we will still be debating in 20 years' time whether Greece has to stay or to exit the euro-zone," Ryall said. "But, in the best case scenario, let's hope that the current situation will be sorted as quickly as possible."

As for other peripheral countries, such as Italy and Spain, Philip Dunne, European president at Prologis, pointed out that the potential of those two countries was greater than Greece's capacity of recovery.

"We do not have any exposure to Greek real estate assets, whereas we still retain some investments in Italy and Spain, as those economies will likely rebound over the long term," he said.

In a panel on the consequences of the recent crisis in the euro-zone for real estate investors, Nielsen added that ATP had "significantly" reduced its exposure to risk over the last 2-3 years and retained a "very" conservative approach when it came to real estate.

He added that, in the current financial context, the team at ATP would be more willing to invest in open-ended real estate funds, as opposed to close-end vehicles, which did not give investors the flexibility to exit their investments if need be.

Finally, when asked whether ATP would be likely to provide debt for real estate projects, Nielsen said the fund preferred to stick with a "conservative" approach.

"We have looked at a number of debt project opportunities over the past months, but nothing has been concrete so far," he said.

Topics