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Risk assessing Europe's safest haven

PERE

The UK’s planned departure from the European Union has thrust Germany into safest haven territory. Marcus Mack (Fund Manager) joins PERE's roundtable in Frankfurt to discuss whether that status is, in fact, also threatened.

No one ever got fired for buying IBM,” goes oneof the most famous marketing slogans of all time. It might be an exaggeration to suggest that no one ever got fired for buying German real estate, but at least at the moment it would only be a slight one.

That is because the UK’s vote to leave the EU has added the olive-on-a-stick to a cocktail of potentially toxic fears and uncertainties that include the increasing stridency of right wing populist politicians across the continent, Greece’s struggles with its debt burden, the region’s ongoing refugee crisis and the heightened threat of mass terror attacks.

Even within the safe haven of Europe that mix is prompting investors to look for sanctuary in markets that offer a high degree of stability, and none of the big real estate markets have a stronger reputation for stability than Germany.

Demand is at an all-time high. The German market saw over €50bn of commercial real estate deals last year and the only factor that could prevent it from reaching that figure again in 2016 is a scarcity of core property.

For investment managers that is both an opportunity and a burden. Capital is abundant, but assets are scarce and expensive. PERE gathered together three managers for this year’s German roundtable discussion at the offices of Corestate Capital in Frankfurt’s Tower 185 skyscraper: Corestate managing director Tobias Gollnest; Matthias Leube, head of asset management and transactions at AXA Investment Managers, Real Assets in Germany and Marcus Mack, fund manager at TH Real Estate. They were joined by Benjamin Friedrich, senior vice president at advisory and investment group Macquarie Capital.

Their task: to identify the strategies that will enable them to capture value on behalf of private equity investors in what is currently one of the hottest real estate markets in the world.

 

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Marcus Mack

Marcus Mack

Fund Manager

Marcus's biography