We were in a similar position last year and all bets are off in terms of where the market will be in another years time. One thing that is (relatively) certain is that there will be another year of volatility and in Europe we are worryingly reliant on politicians to perform in order to try and supply the conditions required for a functional financial market. As this is written we are in another ‘crucial’ week for the Euro, a currency that has a huge political will behind it.
Despite having seen another unsettled real estate market there has, nevertheless, been plenty of activity in certain segments of the market. Value driven investors have been able to justify buying in core locations with strong income and this has been the year when the market has gone back to basics in terms of property fundamentals. Local knowledge and professional skills are needed in a market where values are not driven by a weight of money chasing down yields but rather by key criteria around location, covenant strength and tenant demand. The way to outperform in a constrained environment where clever debt structuring is from a bygone age, is through stock selection and crucially asset management. Property professionals who not only specialise in specific asset classes but also focus on small areas of the ownership process are required to drive the performance of existing and growing property portfolios.
At Cobalt our specialist teams are able to focus on the recruitment of sector specialists in Property Management and Asset Management, with both retail, commercial and residential focuses whose skills are in high demand from both property owners and real estate consultancies. It is these skills who give investors the edge in an otherwise flat market where they have to work hard to get performance.
There are many ifs and buts when looking for predictions for next year, some resolution on the Euro is the clear priority for policy makers and businesses alike. Uncertainty is the biggest obstacle to business progress and when the ECB along with France and Germany navigate us to a reasonable outcome our clients think that there will be a good level of activity in the property world. The world is still turning and many businesses are fighting fit, we just need a little of confidence…
Written by Timothy Rowe – Managing Director – Cobalt Recruitment