麻豆映画

Following a major 鈥渃hange in regime鈥� and widespread 鈥測ield decompression鈥� across European real estate, senior investment managers at Expo Real agree on one thing: macro factors no longer dictate performance alone.

Speaking to 麻豆映画 Real Assets at the annual trade fair in Munich, heads of capital markets and fund management across , and revealed how capital deployment is shifting across the continent.

鈥淭his is not a market where you can buy anything in real estate and expect returns to be strong,鈥� said Jorge Duarte, managing director and head of equity portfolio management Europe at Barings. 鈥淵ou really have to work on asset management to grow your net operating income to deliver outperformance.鈥�

As macro headwinds ease, performance has returned to hands-on operations, navigating severe development constraints and capitalising on the blurring boundaries between real estate and infrastructure.

鈥淢acro factors used to dominate anything that led to changes in valuations,鈥� said Mahdi Mokrane, co-head of fund management at Patrizia. 鈥淏ut over the last 12 to 18 months we鈥檝e seen those asset management-led factors become the dominant factor again, leasing activity, vacancy rates, capex programmes, ESG credentials. All of these hands-on, asset-level factors are now the main drivers again.鈥�

Without rising property values lifting the whole market, managers are concentrating capital on their highest-conviction sectors, primarily living and logistics, where tenant demand and rental growth can still drive returns at the asset level. Barings announced roughly 鈧�2bn of equity dry powder for European real estate earlier this year and has been actively deploying across risk profiles, with a particular focus on residential subsectors and logistics.

鈥淲ithin living, we are investing across a variety of subsectors, including affordable housing, student accommodation and potentially social housing,鈥� said Duarte. 鈥淕ermany is one of our top picks right now because of the lack of liquidity; it has perhaps been neglected by investors over the last few years, but we have seen a quite significant pricing correction across all sectors.鈥�

For Patrizia, driving operational performance relies heavily on data intelligence and technology to manage costs and evaluate building enhancements. 鈥淥n everything related to market data, we鈥檝e been investing in acquiring, storing and curating market data for 15 years,鈥� Mokrane said, adding that the firm now tracks detailed physical attributes across its database to assist asset managers. 鈥淎I today for us has helped reduce costs鈥� we use AI-powered tools that have huge databases of similar assets in their system, and we can very quickly have a much faster initial assessment of the energy efficiency or the capex requirements in just a click of a button.鈥�

Persistent construction inflation, high financing costs and regulatory friction have altered how managers approach ground-up risk, prompting a move toward structured funding models and low-rise developments.

Barings has virtually stepped away from direct development. 鈥淲e are doing very little development, or none at all, frankly. Construction costs remain elevated, and in our view, it does not pay off to take on traditional development risk today,鈥� Duarte said. 鈥淲here we do take on a degree of quasi-development risk, it is through forward-funding deals with developers who already have a building permit ready and a construction contract in place鈥� That allows for relatively short business plans focused on letting risk rather than traditional construction/development risk.鈥�

Greystar faces similar structural hurdles in urban schemes. 鈥淚t is no secret that development viability has become harder in many markets,鈥� said Luke Hamill, head of debt capital markets Europe at Greystar. To mitigate construction inflation, the firm leverages centralised global design and construction teams. 鈥淲e combine our global experience with local nuances, including specific design standards, planning regulations and customer expectations,鈥� Hamill said. 鈥淲hile each market is distinct, there are global standards and experience we can apply to every development.鈥� 

To tackle development viability constraints, Greystar has launched its garden-style rental housing strategy in the UK, targeting up to 20,000 professionally managed homes over the next four years by combining lower and mid-rise homes, green space, and shared amenities.

鈥淎 key part of the strategy is standardisation,鈥� Hamill said. 鈥淏y developing repeatable designs and typologies, we can run development appraisals more efficiently, understand viable land values earlier and bring greater cost and delivery certainty to projects. We have a strong UK pipeline and see potential over time to take the garden-style strategy into other European markets.鈥�

At the same time, the higher-rate environment has shifted relative economics across the capital stack. Greystar initially executed four development transactions as preferred equity in Germany with local partner Primus in Berlin, before expanding the relationship into a new joint venture focused on build-to-rent development in Berlin, Munich, Hamburg and Frankfurt, while Barings sees room to cover the entire capital stack. 鈥淒ebt remains very attractive, the UK in particular looks attractive from a debt perspective right now, as does continental Europe,鈥� Duarte said.

The convergence of real estate and infrastructure

The traditional boundaries separating real estate from infrastructure are becoming increasingly fluid as institutional investors prioritise underlying investment themes and operational yields over rigid asset class definitions. The recurring debate over where real estate ends and infrastructure begins surfaced two years ago at MIPIM in France, and seems to have reached a turning point. This year, Expo Real debuted its dedicated InfrastructureNow platform, formally recognising that real asset allocations are merging, driven by the race for AI-ready data centres, energy grid capacity and social housing. MIPIM itself recently announced that its upcoming 2027 gathering will follow suit, expanding its format across Cannes to introduce dedicated stages for tech, AI and resilient infrastructure.

Illustrating this convergence of asset classes and global capital at Expo Real 2026, real assets manager Patrizia signed a partnership with the Abu Dhabi Projects and Infrastructure Centre during the Abu Dhabi Infrastructure Summit roadshow at the fair. The agreement creates a framework to explore private capital participation, public-private partnership structures and co-investment across Abu Dhabi鈥檚 AED200bn ($49bn) capital project pipeline.

Patrizia has broken down structural barriers internally by establishing a unified investment committee across both asset classes. 鈥淚 look into the infrastructure deals. My counterpart in infrastructure looks at real estate transactions, buying and selling,鈥� said Mokrane. 鈥淪ilos are not always ideal if you can break them in a way that doesn鈥檛 hurt productivity and even improves it.鈥�

Mokrane said the key secular drivers of digitalisation, urbanisation and energy transition naturally overlap across the built environment. 鈥淎t the end of the day, I think investors today increasingly look at themes: What do I want to get exposure to? What kind of capital market solutions am I looking for?鈥� Depending on what they鈥檙e looking for, they鈥檒l go for the theme more than the asset class.鈥�

Greystar also sees functional crossover between living strategies and infrastructure. 鈥淭here is an overlap between the asset classes,鈥� Hamill says. 鈥淔rom an investment and financing perspective, it ultimately comes down to the characteristics of the underlying income. Student housing sold into the private market operates much more like traditional real estate, whereas a long-duration nomination agreement with a university can start to take on infrastructure-like characteristics.鈥�

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