Patrizia: When opportunity knocks

With the right value-add partner, investors can take advantage of emerging real estate opportunities, says Mahdi Mokrane, Patrizia’s head of global investment strategy, research and investment solutions.

Mahdi Mokrane

After a challenging 2022, the real estate industry is gearing up to capture any available discounted opportunities.

Discounted core assets are already starting to emerge. We expect this trend to accelerate during the course of 2023 and 2024 as weak economic growth and relatively high inflation give way to an economic rebound and interest rates settle. When economic uncertainties start to clarify, large amounts of available capital will be freed up and could find a home in real estate assets. Leveraged core has come to an end offering higher-octane investors with disposable dry powder opportunities to take advantage of possible cut-rate deals resulting from market correction and difficult refinancing situations.

Now is also a good time for core investors and their managers to future-proof their portfolio. Ramping up exposure to environmental, social and governance-compliant assets and decarbonizing existing assets is critical to remain relevant to both occupiers and asset owners. Likewise, it makes sense to add alternative property types, such as student housing and self-storage, to diversify existing portfolios.

Investors need the guidance of the right partner to take advantage of these emerging opportunities and maximize income resilience. Our local market expertise and proprietary data intelligence tools can provide cutting edge intel and solidify investment decisions. 

Firstly, our data can determine whether a potential asset is optimally located with respect to amenities that tenants value. Furthermore, we benefit from real time asset pricing to determine the optimum bid to place in the market. Data also helps us assess whether an asset does or could benefit from a green premium. 

Looking forward, data will play a vital role in identifying which assets will best cater for the needs of future tenants. These may not necessarily be the best assets right now, so they can be acquired at a discount before we reposition them and create value.

We also select real estate that meets tenants’ changing needs to guarantee that the property will provide long-term, sustainable income, and we ensure that our buildings meet the latest green credentials to satisfy growing ESG demands. However, we make sure to invest the right amount of capital to add attractive features that are tailored to what tenants will look for in the space they will occupy in the future. 

Finally, we have a number of debt lending relationships we can leverage to help clients optimize debt terms that match their risk, return and liquidity requirements. With a stable and solid financial footing and under no pressure to invest or disinvest, we believe we are in a strong position to seize any opportunities on behalf of our clients as we move ahead into 2023.