Despite a slight improvement in sentiment, Europe’s non-listed real estate funds suffered their sixth consecutive quarter of negative capital growth.
The quarterly Market Insights report from Inrev, the European association for investors in non-listed real estate, showed an ongoing correction in the market, albeit with an indication of a more positive sentiment among investors.
The report also showed the first increase in transaction volumes across Europe after seven consecutive quarters of decline, marking the end of the longest run of no rebound in investment activity.
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However, the €42.1 billion remains a long way off the long-term quarterly average of €57.4 billion, stated Inrev.
The association also noted a sharp decline in the quarterly asset level index for pan-European office assets which reported their weakest quarter since the inception of the index in 2014.
“The latest results show a clear shift towards a more positive sentiment, but it is premature to declare this as a turning point in the cycle,” said Iryna Pylypchuk, director of research and market information at Inrev.
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While economic and leasing subindicators suggest a more positive rental growth outlook across most sector, “ongoing pricing discovery and broader financial, economic and political risks continue to make it difficult for investors to foresee the depth and the duration of the current correction” said Pylypchuk.
