Redevco to build up EUR 3-4bn Asian portfolio

European retail property specialist Redevco intends to build a EUR 3-4bn portfolio in Asia over the next five years, CEO Jaap Blokhuis told the Provada property fair in Amsterdam on Tuesday. Redevco owns and manages a property portfolio, valued at EUR 7.6bn, in 20 European countries. Redevco opened an office in Hong Kong in May to drive its activities in Asia. The office is led by Robert Lie.

Blokhuis said the decision to open the office in Asia stemmed from a study of the investment opportunities in about 30 countries in the world. 'We have taken a long-term view in Asia, whereby we expect to lose money for three years and to make a lot of money in the next 50. Asia is not the place for people with weak nerves,' Blokhuis said.

Redevco believes Europe will play a much smaller role in the world economy in the future. 'I expect only single-digit returns in Europe in the next five years. You can get an internal rate of return of between 15 and 20% in China, but you just know you will encounter problems every now and then.'

Blokhuis was commenting during the international real estate investors debate at Provada. The other participants were Corio CEO Gerard Groener, Buddy Roes, country manager Germany at ING Real Estate, and Tim Sketchley of Cushman & Wakefield. Groener said Corio had no plans to invest in Asian markets. 'Corio is a pure European real estate company,' he said.

Sketchley said the credit crisis is causing real estate investors to return to Europe's 'core markets' in search of a lower risk profile. Recent research conducted by Cushman & Wakefield indicates that investors are currently showing a preference for stabile European markets.

Germany was on top of the list, followed by France, the UK and Spain. Central and Eastern Europe- one of the most popular destinations for real estate investment in recent years, was bottom of the list with a high-risk profile.