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Capital Views - Risk versus Opportunity

David Hutchings

David Hutchings

International Partner

Phone +44 207 152 5029

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A CAPITAL MARKETS PUBLICATION


This year has started well for the property investment market with strong momentum maintained from 2014 and improving occupational sector news also registering in an increasing number of markets. However, we are also seeing a growing range of risk actors and while most are not necessarily new, they are providing investors with food for thought as they refine their strategies for the year ahead.

In a sweep across Europe, we have seen the unimaginable horror of events in Paris, heightened conflict in Ukraine, unexpected policy decisions in Switzerland, strains among the EU partners over monetary policy, a new party taking power in Greece and rising pressure from extreme political parties in a range of countries over issues including austerity, immigration and jobs. 

The implications of all of these trends is far from clear – and in reality the fates they will bring are of course not yet written; they will only be formed over the coming weeks and months as decisions are made.

What is more, with elections to come in the UK, Spain, Portugal, Poland, Denmark, Finland and Turkey among others, politics are clearly going to remain front and center and investors need to develop appropriate strategies to both minimize risk and position themselves for the opportunities that will emerge.

The simple message is that performance will remain volatile and divergent market by market. At the same time however, performance drivers will be more compelling, with interest rates low, liquidity high and occupational market growth improving as a result of lower oil and commodity prices, a lower euro and stronger real spending power. 

A nuanced market therefore lies ahead, with real growth potential but also with a range of risks that have to be understood at both a macro and a local level.