Corestate, a leading independent investment management company for real estate and related financing solutions, is publishing its latest study entitled “Private Debt and Real Estate Financing – A Winning Asset Class in Uncertain Times.”
Frankfurt, 9 December 2021 – Corestate, a leading independent investment management company for real estate and related financing solutions, is publishing its latest study entitled “Private Debt and Real Estate Financing – A Winning Asset Class in Uncertain Times.”
“Private real estate debt continues to gain traction as an asset class. This is a long-term trend that has been reinforced by COVID-19. Investor demand both for related products and also advisory services is high and so we see the number of new real estate financing funds launched in 2021 heading for an all-time high,” said Mark Holz, Group Head of Research at Corestate.
The study delves into the following topics:
- The private real estate debt market: history, drivers, returns and outlook
- The real estate market: a brief look at the individual sectors with cyclical and structural developments and always with a view to the financing landscape
- Green real estate financing: Overview, incentives and approaches of green financing.
“Our internal evaluations have shown that investment opportunities declined in the corona phase. The financing side, on the other hand, was quite different, with a slight increase in financing opportunities. Thus, private debt benefits not only from attractive risk-adjusted returns, but also from high liquidity. The more restrictive behaviour of traditional lenders such as banks is an important factor here. For investors, this means that there is no bottleneck in the private real estate debt sector, but that capital can be called up and put to work,” Holz added.
The quality of financing depends significantly on the quality of the assets and the markets behind them. The study therefore summarises the most important structural topics and trends in the individual real estate sectors. Finally, and decisively by the in-house ESG team headed by Georg Schattney, the focus on “green real estate financing” is examined. The political and regulatory framework surrounding green financing instruments will be analysed and, building on this, the advantages of green financing will be presented and potential subsidies discussed.
“Green financing already serves investors as a kind of hedge for future regulatory requirements in the case of long maturities,” commented Schattney, Group Head of ESG and Sustainability Officer at Corestate. “It can thus counteract a possible malus for non-ESG-compliant investments, which can certainly be expected in the coming years. In addition, real estate investments in green buildings generally offer the advantage of comparatively lower operating costs. This leads to higher tenant satisfaction, which in turn reduces tenant turnover and increases the acceptance of higher rents.”
About CORESTATE Capital
CORESTATE is an investment manager and co-investor with around € 28 billion in assets under management. The company sees itself as a manager for the entire length of the real estate value chain. Thanks to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale societal trends such as urbanisation, demographic shifts or sustainability – trends that will continue to have a decisive influence on the living and working environment in the long term. The consistent focus on asset classes that will be successful in the long run constitutes a central cornerstone of the company strategy. At CORESTATE, all concepts are supported with ESG expertise that is unique to the industry. With 830 experts, CORESTATE offers clients and investors a full range of services and consultation from a single source, from project financing and real estate management to sales. CORESTATE is listed on the Frankfurt Stock Exchange and operates as a respected business partner for institutional and semi-institutional investors as well as high-net-worth private investors in 11 countries across Europe, with offices in Frankfurt, Vienna, Zurich, Paris, Madrid and London.
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