Europe’s largest retail estate fair, MIPIM, which took place in Cannes last week, has shown that the industry was on the move. Interestingly enough, the market mood is by no means as negative as is frequently suggested. On the contrary, Arnold Investments reports lively interest from international investors. The focus is particularly on properties of up to €50 million. “Many deals are about to be finalized”, summarizes Markus Arnold, CEO and sole owner of Arnold Investments.
Residential properties in good Viennese locations are also in greater demand again due to more attractive yields. Based on higher yield levels, Arnold Investments, therefore, expects that significantly more attractive investment opportunities will rise again in the first half of 2023. The current uncertainties in the banking sector are also noticeable. “Exchanging money for concrete to secure assets will become appealing again”, reckons Arnold.
Hospitality is growing
The European hotel investment market was comparatively stable in the previous year, marking a slight decline of - 6 % to a total volume of €10.6 billion. In Q4 2022, hotel real estate was the only asset class in Europe that recorded a significant increase in transactions in the corresponding period. “This trend will continue in 2023”, assesses Markus Arnold based on numerous investor discussions at this year’s MIPIM fair. This is why the company recently expanded in the hospitality area.
Southern Europe benefits
In 2022, the focus of investors has shifted towards the Southern European real estate markets. Spain, Portugal and Italy, where Arnold Investments has its own branches, were able to increase the investment volume last year, in some cases significantly. The reason for this is better economic fundamentals due to lower dependence on Russian energy supplies. In the industrial sector in particular, the competitive advantages have shifted from Germany, Austria, and the CEE countries towards Southern Europe. “The transactions so far in the first quarter show that this trend will continue”, says Martin Ofner, Head of Market Analysis at Arnold Investments.
Retail still strong
The developments unfolding in 2022 will continue in 2023. According to the market analysis of Arnold Investments, the EU-wide investment volume in retail real estate rose by around 18 % to around €29.1 billion in 2022. The repricing of retail properties, which was triggered years ago by competition from online trading and the pandemic, makes it easier for buyers and sellers to determine the price in the current market situation.
