Schroder upbeat about European property fundamentals

Schroder European Real Estate Investment Trust, a property fund that gives SA investors exposure to European cities, has sounded a note of optimism, saying its properties in that continent are in demand.  

“Our office assets are located in high-growth cities where supply of office stock is constrained and rentals are affordable, making them attractive for occupiers. These assets also provide above-rental average growth,” Jeff O’Dwyer, a fund manager at Schroder, told Business Day. 

 The London Stock Exchange- and JSE-listed company, which acts as a rand hedge for SA investors who want exposure to European commercial real estate, has three assets, in Germany and France. 

O’Dwyer said there was good demand for quality offices in city centres close to amenities that provide space for people to meet and collaborate. “We expect that office demand will start to gain sustained momentum throughout 2022.”

The fund’s office assets are located in Paris (France), with two in Hamburg and Stuttgart in Germany. In total, the company has 13 properties that comprise six industrial, three retail, and one mixed-use.

O’Dwyer said limited speculative development in the office market in these cities has seen their assets perform well during the period. In particular, the Hamburg property located one stop from the city centre has been one of the stronger performing assets given its accessibility and affordability.

“With assets located in European cities such as Paris, Hamburg and Stuttgart, this provides comfort as we expect these cities to quickly return to growth.”

He added that the company will acquire select office, industrial, retail and mixed-use assets in cities with exposure to higher economic growth in France, Germany and the Netherlands. 

mhlangad@businesslive.co.za