Deals delayed as investors regroup

If Expo Real is a barometer of sentiment in the European real estate industry, this year the reading was almost indecipherable. As Peter Schreppel, CEO of CBRE Germany, commented during an interview with PropertyEU: ´If you ask five people, you will get five different views.’

During the three-day event, PropertyEU interviewed almost 100 developers, investors, asset managers, financiers, advisers and city leaders in our ongoing bid to provide direction in a world beset by sovereign debt woes and capital market turmoil. The results are available in the three issues of the EXPO REAL Daily News that the PropertyEU team produced on the ground in Munich and which were distributed on each of the three days of the fair. A link to the online versions is available at the end of this article. The same link also offers an overview of the webcasts carried out at the fair by PropertyTV with a select group of leaders from the top cities in Europe.

In the coming weeks, our reporters will follow up leads on deals, financing transactions and fund launches obtained in Munich and analyse the key trends in the various segments of the industry. One thing is already clear: deals may be delayed as Europe remains in the eye of the storm, but appetite for real estate is still sound if not exactly thriving. Some parties even see signs that the long wait for sales of distressed loans and portfolios may finally be coming to an end.

Are they being too optimistic? As one delegate noted: 'If the definition of an optimist is a happy idiot, by inference, a pessimist is an unhappy idiot. Well, I'd rather be a happy idiot.'

Here is a selection of other quotable quotes from delegates at Expo:

´The market is concerned because something is going on that is beyond participants’ control. Hopefully, we will have clear answers in the next quarter.’ (Thomas Köntgen, the new CEO of Eurohypo)

‘Sentiment is driving the market more than data and it’s getting worse when you look at what’s being dumped in the market at prices that are too high. The cost of debt going forward will depend on how close we get to the cliff - and how far the contagion spreads - but it could get very expensive.’ (Joe Valente, head of research and strategy at JP Morgan)

´There’s a disconnect between the wider macro-economic, financial and fiscal world and what´s happening in our business.’ (Philip Dunne, President of Prologis Europe)

‘I actually think we’ll see more opportunities in 2012/2013, especially with regard to state sell-offs in countries like Italy and Spain.’ (Eric Sasson, managing director of Carlyle Europe)

‘There is something wrong with pricing risk when Milan offices are being offered at yields of 5% and core Spanish retail at 5% in the middle of the sovereign debt crisis.’ (Mahdi Mokrane, head of research and strategy at AEW Europe)

‘There is a growing need for insurance companies to become the "Seventh Cavalry" to plug the debt gap in Europe. To insurance companies, I would say: "Please gallop faster, the market needs you."’ (Paul Rivlin, co-founder of Palatium Investment Management)

‘Investors are more cautious and some investment transactions may be slightly delayed. But overall there’s still an intent to go to the market. The big issue will be timing.’ (Giles Wilcox, head of cross-border investment at Savills

‘There’s not much good quality product available and it’s a competitive market. Shopping centres are also difficult to find at the right price.’ (Reinhard Kutscher, chairman of the board of Union Investment)