KIC advised to invest in Europe's residential market

Europe's residential real estate market has stronger growth potential than the US housing facilities, given the growing preference among millennials for rental housing with various amenities, Korea Investment Corporation (KIC) quoted a London-based real estate investment firm as saying on Wednesday,

Tristan Capital Partners, a UK boutique firm, said Europe's residential facilities could become an attractive target for South Korean institutional investors. It advised them to invest in Europe's rental housing facilities in partnerships with local firms and renovate them to improve their value for a profitable exit.

The remarks by Simon Martin, Tristan Capital's senior partner and head of research and investment strategy, were made during a presentation for an online meeting hosted by Korea Investment Corporation (KIC) for the country's financial institutions.

He gave the presentation on the topic of the post-pandemic outlook for Europe's commercial real estate market, KIC said in a statement. 

Martin added that the environmental, social and governance (ESG)-related regulations and environmental issues such as climate change are having a direct impact on the commercial real estate market. 

Europe's commercial real estate market, including prime assets, has been suffering from supply shortages hit by the pandemic-caused liquidity shortage, which also brought down the prices of some shopping malls and hotels. But the values of core assets remain intact thanks to steady money inflows, he noted. 

In the prolonged COVID-19 situation, European hub cities of knowledge-intensive industries such as life science and technology are showing strong recovery from the pandemic impact in terms of the return to offices. The cities are expected to attract more working-age population, Martin added.

KIC hosted the virtual meeting for the London International Financial Cooperation Council, composed of members from South Korea's 23 public and private financial institutions with operations in the UK. KIC launched the council in February 2018 to share information and networks for global investments.

By Yeonhee Kim