Analyses and trends


20.03.2013 Big problems at low prices

Many speculations are on the topic of what stage of the cycle is the real estate market in Europe, I passed the worst of the financial crisis and when the situation will normalize.
Of the many expert opinions clearly only one - no single answer. The market is very fragmented and in most cases each country individually. Investors have different expectations for return and risk levels that are willing to take, different locations and different types of assets. And according to many experts this situation probably represents a new "normal".

The truth is that the market has yet to tackle a number of important tasks, one of which is the issue of huge inventory of distressed assets pazarlizirat system and does not allow creditors to "open the tap" for fresh funding.

In many posts after the sector is "clean" of these problematic portfolios (whose scale, cost and potential risk can not even be estimated with accuracy), the market will again become effective.

What is the current situation of troubled assets and what are the attitudes of investors to markets in Western and Eastern Europe?

In response to these questions exclusively for said Denise Hammer, a partner at the international law firm Schoenherr, following a meeting with industry representatives at the forum Real Estate MIPIM 2013, held last week in Cannes.

Its analysis is based on ekseprti posts from leading consulting and law firms operating in the property markets in Ireland, Britain, Germany and Italy, Portugal, France and the Netherlands. According to them, these countries still have a huge amount of distressed assets, some of which are separated after the restructuring of troubled companies. This further increases the inventory to be absorbed.

Familiar pattern

However, the markets are considered to be attractive to investors because of the low level of risk with which they are associated - for example, in the UK and Ireland. Other factors are the Anglo-Saxon legal system, which investors are familiar with, and the presence of "bad banks" in countries like Spain, Ireland and Germany.

This is why these markets attract large American and British investors, Lonestar, Wilson Kennedy, Cerberus and Fortress, and their attraction is expected to continue in the coming years.