Tim Wilkinson MRICS, Head of European Acquisitions at Indotek Group, talked to Property Forum about the company’s investment plans and shared his expectations for 2025.
This interview was first published in Property Forum’s annual CEE TOP 100 publication.
How would you summarise Indotek Group’s international expansion strategy? What kind of assets are you looking to add to your portfolio?
Our focus is on securing assets with solid underlying property fundamentals, yet in need of fresh capital to realise their full commercial potential. We are bringing liquidity to parts of the European real estate market that have become relatively illiquid, mainly due to the increased cost of capital & more negative general sentiment towards certain asset classes.
We can invest across 4 commercial sectors (retail, office, industrial & hotel) in 12 different European markets.
Tim Wilkinson MRICS
Head of European Acquisitions
Indotek Group
Which are the European markets where you see potential for investments in the medium term?
The repricing of Western European markets over the past 2 years has created a compelling environment for our investment strategy in countries like Spain & Italy. This has made CEE & SEE look relatively expensive in the context of the wider European market, given the more limited repricing that we have seen in the region. As an opportunistic investor, we expect those Western markets to continue to offer an attractive environment for us.
CEE & SEE will continue to be an important focus for us, but as we feel that the repricing of the region is still playing out, it may be more challenging to find the right opportunities in the short term when compared with markets further West.
How are you keeping your property portfolio up to date considering the emerging trends in the real estate sector?
We are an active, hands-on manager of our portfolio and therefore close to changes in the market that can create opportunities or challenges. Our European team is rapidly growing and having strong in-country capabilities gives us strength in both the understanding of each market and the ability to act fast.
How important are ESG credentials for your acquisition strategy?
We tend to buy assets that need upgrading and repositioning. This gives us the ability to be able to assess ESG compliance & strategy as part of the acquisition process, to ensure that we are building this into our business plan upfront. The subject of ESG has also created opportunities for us, where owners seek to divest to transfer future CAPEX needs related to ESG to new capital.
What are your expectations from the financing environment going into 2025 considering the reduction of interest rates?
I feel that debt markets will remain challenging in 2025 for assets other than prime. The cost of debt will drop but given the spectrum of global risks, I maintain a cautious outlook on the debt markets over the next 12 months.
Which real estate segments are slated to generate deal volumes in CEE this year?
I believe that 2025 will be dominated by logistics and retail transactions, with some strategic divestments in the office market driving up volumes in that sector compared to 2024. The former will be due to improving sentiment in those sectors, the latter driven by the ongoing price discovery following the overall drop in interest in the office sector and uncertainty around the true level of occupier demand.
