Global real estate investor Oxford Properties Group is upbeat on the outlook for single-family homes, BTR and life sciences, its three key areas of interest, but remains alert to affordability issues in the residential sector.
The company operates across Europe, with a focus on London, Paris, and Berlin. It has additional activity in Spain and Denmark (logistics), Cambridge (life sciences), and major regional cities in the UK (residential development).
Speaking to PropertyEU in Cannes, Abby Shapiro, senior VP Europe, highlighted that single-family and BTR share a favourable supply situation, with limited availability driving demand. This trend extends to life sciences, especially in established markets like Cambridge, and even high-quality office spaces.
‘However, the big question is residential and the affordability ratio, which is impacted by the wider economy and people's sense of one kind of financial security, but also wage growth. So, that's probably the key thing that I'm focused on,’ she pointed out.
Supply remains favourable for life sciences in key locations like London, Cambridge, and Oxford. While there's some caution in decision-making from companies, established markets are showing healthy absorption. Patience is evident in some areas, particularly London, but the long-term fundamentals remain strong.
In terms of securing financing, much depends on the property itself. Oxford Properties recently successfully refinanced the Blue Fin building, a prime office location in London with high occupancy. ‘We secured excellent terms because of the building's quality and low risk. However, traditional lenders are more cautious about properties undergoing change and those with higher lending risks,’ Shapiro pointed out.
Oxford Properties is also actively evaluating credit opportunities and has a pipeline of potential deals, which may yield something soon.
In terms of geographic presence, the company is not considering entering new markets for the time being. Said Shapiro: ‘For now, we're very happy with our markets and I could see expansion into other markets that could get serviced by those locations. But I would say for the moment, we are looking at taking credit opportunities. That's a great way for us to learn a new sector or a new market at a lower cost basis with slightly less risk.’
Turning to the mood at Mipim, Shapiro said there is a sense of cautious optimism at this year’s event. ‘People are hopeful that the market will pick up and allow for more transactions, but there's also a wait-and-see approach regarding interest rates and the overall economy. Interestingly, some key themes like logistics and residential seem to be getting a lot of attention, while people are still bearish on offices.’
