Europe’s largest real estate fair will take place this week under uncertain conditions. But where weak players are now dropping out, established parties are holding on.
The largest real estate fair Expo Real in Munich started at Utrecht Central Station on Tuesday. This year the train is more popular than ever compared to the plane to get to the event. ESG-responsible travelers are also trying to benefit from the Octoberfest. The star under which the fair takes place is less festive. Processing the interest rate increase and the Ukrainian risks are taking their toll. The Economist recently described the European economic engine Germany as the ‘sick man of Europe’. Earlier, outgoing BPD CEO Walter de Boer said that the German market is much more pessimistic than, for example, the Dutch market. In Germany, BPD is affected by a buyers’ strike, while this is not the case in the Netherlands.
A conversation with Expo director Claudia Boymanns with PropertyEU shows that the number of exhibitors – 1850 from 36 countries – has remained fairly stable. She is particularly pleased with the delegation of the listed real estate asset manager Patrizia with more than a hundred participants. More about Patrizia’s vision of the Dutch market will follow in the coming days. Boymanns is also happy with newcomers from Dubai and Saudi Arabia. The Netherlands and Italy are strong as ever and the British cities are also making themselves known with a joint stand. On the other hand, Romania and Bulgaria are no longer present.
PropertyEU had a conversation with Cromwell Property Group CEO Pertti Vanhanen prior to the fair to gauge the mood. He is not confident about the market’s processing of the interest rate increase. There is already some optimism in the Netherlands because interest rate increases have come to an end. He says that one should not take too lightly about the highest European interest rate since 1999 and speaks of ‘exceptionally difficult circumstances for refinancing.’ Vanhanen also expresses his concern about the deal volume of real estate investments, which has fallen by 50% in Europe compared to last year. He expects that many investors will show their face, but will not be able to take action.
Christian Baerman, partner of Arrow Capital, sees that the real estate investment market is reacting much faster than in previous crises. This was also the opinion of CBRE CEO Europe, Marco Hekman. The advantage of being able to write down more quickly and say goodbye to weak players is that the market can get used to ‘the new normal’ again.
In the meantime, Expo Real continues to offer discussion platforms, with a lot of attention to ESG, of course. PropertyEU even published a special edition on this subject and the relationship with real estate on the occasion of the fair. The highlight of the Expo on Friday will be the world-famous Indian/American guru Dr Parag Khanna of the book ‘Move: how mass migration will reshape the world’. In the meantime, PropertyEU offers the daily stock exchange newspaper with information and hopefully also some deals from ‘sick’ Germany.