Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites.
Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. For avoidance of any doubts and to make it easier, you may consider any links to external websites as sponsored links. Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

CATELLA: ASSET MANAGEMENT MARKET IN EUROPE BENEFITS FROM VALUE-ADDED INVESTORS

The new Catella Market Tracker „Strong focus on value-add investments“ shows a considerable interest in “value-add” investments by institutional investors. With major consequences for the value added in downstream asset management markets: for each euro invested, asset management measures worth 20 cents are capitalized.

In 2016, properties with a total value of EUR 256 billion changed hands in Europe in the commercial segment (office and retail). Catella Research estimates that around EUR 50 billion of this (20%) is related to value-add properties. “As a basic scenario, we anticipate an average potential for resulting asset management services totaling at EUR 6 billion to EUR 10 billion by 2021” says Dr. Thomas Beyerle, Head of Group Research at Catella. On average, the AM potential thus comes to just under EUR 1.6 billion per year in Europe. “Based on the transaction data, we can see that in a comparison throughout Europe, the highest value-add transaction volume in 2016 was to be found in Germany (25%), the UK (22%) and France (14%)” Beyerle continues.

But what comes after the “value-add” investment, do these properties in fact have structurally higher risks in relation to the specific properties, tenants and locations? In this complex risk-adjusted situation, asset management therefore also increasingly requires attention as a value driver, say the analysts of Catella. To put it more simply: for the investor, a value-add classification is associated with more work with the property itself. In the current positive market situation on the European property markets, nevertheless the complex situation represents an opportunity for an increase in value. Stabilizing or increasing the cash flow component is a tactical objective. Strategically, this should certainly be accompanied by an increase in the change-in-value yield at the total return level.

Derived from the motives for value-add investments in the last years, profitable elements at property level will anticipate at the current purchase price by rational acting investors. Although general statements can only ever provide an indication and the operational value driver is only to be found at the level of the individual property, Catella assume that for each euro invested, asset management measures worth 20 cents are capitalized in the coming years. Nonetheless, documented expertise in strategic and operational asset management is essential.

The complete Catella Market Tracker “Strong focus on value-add investments” is available at www.catella.com/research.