Generali Real Estate I Private Commercial Real Estate Debt
In Short
Only for professional investors subject to the Directive 2014/65/UE that act on their owns and/or on behalf of third parties on discretionary basis.
Executive Summary
Amid an environment of historically low government bond yields, institutional investors are increasing their strategic asset allocation towards alternative asset classes, which are typically less correlated to traditional investments and are able to deliver a premium over traditional fixed income.
Real Estate is one sector experiencing steady interest from investors. Commercial real estate (“CRE”)
backed financing represents a large element of the real estate universe.
Regulatory constraints and fading risk appetite from the European banking sector over past years have created an opportunity for non-bank lenders to fulfill a lending gap for the real estate sector that has emerged during the last few years.
The European commercial and residential property loan market has become an increasingly significant investible universe, with impressive growth potential. In contrast to the US market, where alternative lenders are more consolidated, the European CRE debt market is still mostly penetrated by traditional lenders.
Despite the steady compression in interest rates seen the past decade, margins on real estate senior loans have remained fairly stable, making the asset class appealing on a risk-adjusted basis.
With low yields across Europe, real estate debt has become an asset class with potential to generate attractive and stable net income yields for investors, as well as becoming an asset class complementary to real estate equity.
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