With many large institutional investors shifting their strategies to core products in prime markets in the wake of the credit crisis, the benefits of pursuing a secondary market investment strategy in Europe are growing, according to Peter Kasch, managing partner with Catalyst Capital. 'Yields are not only higher, but there is also a little less competition,' he said in an interview with PropertyEU at Expo Real. Assets in secondary markets are frequently in need of renovation or rehabilitation and suffer from low occupancy rates, he added. 'There’s more opportunity to do something.'

With many large institutional investors shifting their strategies to core products in prime markets in the wake of the credit crisis, the benefits of pursuing a secondary market investment strategy in Europe are growing, according to Peter Kasch, managing partner with Catalyst Capital. 'Yields are not only higher, but there is also a little less competition,' he said in an interview with PropertyEU at Expo Real. Assets in secondary markets are frequently in need of renovation or rehabilitation and suffer from low occupancy rates, he added. 'There’s more opportunity to do something.'

Kasch pointed to the emergence over the last few years of new and more aggressive buyers in certain markets in the UK and France, some of whom may either have overbid for investments or been able to justify the high price as a result of financial engineering that will no longer be possible. With rising yields and falling prices in secondary markets, Kasch said that exiting from those investments might prove difficult further down the road. 'I'm proud of not having succeeded in bidding for certain assets,' he said.

Catalyst Capital's own investment strategy is defined at the beginning by thinking of an exit strategy, Kasch said. The firm's typical investment time framework typically ranges between three to five years, he said. 'This provides enough time to renovate assets and in some cases renegotiate expiring leases.'