INTERVIEW: ‘Wall of capital requires disciplined approach’

As the wall of capital bears down on the European real estate industry, the challenge for investors will be to remain disciplined on asset selection and pricing, says Sophie van Oosterom, CBRE GI’s new CIO EMEA.

Van Oosterom joined CBRE Global Investors 18 months ago as head of Special Programmes EMEA. She previously worked for Lehman Brothers Real Estate Partners (now Silverpeak Real Estate Partners), where she was European head of asset management.

On joining CBRE GI, she led the repositioning of various special programme funds, including the €2 bn Dutch Office Fund and the European Industrial Fund.

As CIO EMEA, Van Oosterom will focus on investment strategy, investment underwriting and performance management in the region. She replaces Will Rowson who left the firm at end-January to join boutique advisory firm Hodes Weill & Associates as a partner in London. Van Oosterom will also chair CBRE GI’s European investment committee.

PropertyEU: What will be the main priorities in your new role?
Van Oosterom: My focus will be on driving investment performance for our clients across EMEA. CBRE Global Investors is one of the few investment managers with a truly pan-European operating platform; we have asset and transaction managers on the ground in most European markets, bringing a wealth of local knowledge and expertise. There is scope to share and implement best practices from successful initiatives. My aim will be to further unlock and develop that potential for the entire group.

PropertyEU: Does CBRE Global Investors have a specific EMEA investment target for 2015?
Van Oosterom: We are targeting around €4 bn of acquisitions throughout Europe for our various funds and separate account clients. This will be mainly core product in prime locations, but we are also able to leverage on our management capabilities and take on asset management opportunities to further enhance returns.

PropertyEU: Can you be more specific on the asset management opportunities?
Van Oosterom: As the largest non-listed owner of retail assets in Europe we leverage our understanding of operating performance drivers across centres and geographies to improve acquired assets. Similarly, we are one of the top 5 logistics investors in Europe, with dedicated asset management teams on the ground that can take on leasing opportunities to improve returns. Another example would be our prime office vehicle in the Netherlands, where we look to add value through lease-up activity and even development in prime locations.

PropertyEU: What do you see as key challenges facing the European real estate industry in the year ahead?
Van Oosterom: Over the past couple of months various submarkets have become very competitive, with a wall of capital chasing assets. The shift in investor interest from the northern core to the southern periphery has been swift. Initially there was just a lot of market talk and no real transaction activity, but over the past year pricing of Spanish assets has moved very quickly. For certain segments of the market, capital markets appear to be ahead of fundamentals. The challenge for the industry will be to remain disciplined on asset selection and pricing, avoiding a next bubble.

PropertyEU: You have built up wide experience in restructuring investment funds since you joined CBRE Global Investors 18 months ago. Will we see more of this in 2015?
Van Oosterom: We enhanced a number of investment products last year to strongly position them for the future with modern and aligned terms and conditions, liquidity provisions and governance. On other funds, we actively managed the liquidation process. This is an ongoing process; we will continue to monitor and improve our funds and other investment products to ensure they satisfy investor demand.

PropertyEU: Where will you be based?
Van Oosterom: I have recently moved back to the Netherlands after living in London for about 15 years, but I will continue to spend time at our various European offices.

PropertyEU: What are your interests outside the office?
Van Oosterom: With three young children at home and this job, I don’t have much time for anything else!