On June 10, the Real Estate Investors' Debate, organized by Real Estate Publishers (REP) , took place on the first day of PROVADA 2008 at the RAI in Amsterdam. This international debate was moderated by Prof. P.M. Eichholtz, Chair of the Real Estate and Finance department at Maastricht University.
FLTR: Tim Sketchley, Chairman Capital Markets Group Cushman & Wakefield, Buddy Roes, Country Manager ING REIM, Jaap Blokhuis, CEO Redevco Europe, Gerard Groener, CEO CORIO, Piet Eichholtz, Chair Real Estate and Finance department at University Maastricht.
Chair Professor Piet Eichholtz opened the debate by reflecting on how fundamentally the market has changed in the past year as a result of the credit crunch. He questioned the panelists whether international investment could be a crisis-proof strategy for the future. Here are some snapshots and soundbites from the debate.
Investing in Europe
- Gerard Groener, CEO of Corio, "The EU shouldn't be considered as one country, because of the different legal, financial and cultural issues, so you still need to negotiate on a local basis."
- Buddy Roes, Country Manager Germany at ING REIM, "Real estate is a local business. Cultural awareness is a need to be successful."
- Tim Sketchley, Chairman Capital Markets Group at Cushman & Wakefield, "People are coming back to the core markets of Western Europe, a return to reduced risks, and that local knowledge provides a competitive advantage."
- Jaap Blokhuis, CEO of Redevco Europe, "Asia is a long-term investment strategy. Europe is aging and will play a different role in the future. Europe is a diversified place."
- Roes: "Europe is a complex structure and it's easier to grow in the US."
- Sketchley: "From the American point of view, Europe is divided into two: Western Europe and Central and Eastern Europe (CEE). Western Europe is a replacement market, where the CEE is a growing real estate market, particularly Russia."
So what about Asia?
- Buddy Roes: "If you look at the GDP fundamentals, it doesn't seem that Asia is going to be hit as much as the rest of the world."
- Tim Sketchley: "You need local experience and people on the ground first."
- Jaap Blokhuis: "You need local knowledge and a local view, and you have to factor loss into setting up in a new market."
In his conclusion, Chairman Professor Piet Eichholtz stated that diversification is not without risk. "Rental cash flows are driven by different things. Asia is not for diversification, but for growth potenti