Executive Summary

The case for value-add in Europe today is supported by several factors.

• Despite the recent increase in uncertainty around the economic outlook, European real estate values have gone through a big correction and are set for a rebound in the coming years. Some parts of the market are set to rebound faster than others. 
• After a relatively subdued investment and building cycle, there are supply shortages, even in parts of the market with resilient demand. In addition, there is a need for capital to modernize existing stock and meet the growing ESG requirements of institutional investors. 
• Low liquidity persists and today’s market can offer an attractive entry point in terms of being able to selectively acquire assets below valuation and capture immediate upside. 
• The value-add opportunity set is expanding to sectors not traditionally seen as part of the investment landscape, including operationally intensive sectors that offer higher potential returns but require more specialist expertise to execute on.