CANNES, FRANCE-Asked to define the UK, Joe Valente, head of strategy for Allianz Real Estate, told an assembled crowd that the UK was "an overpriced market on the edge of Europe." In a session that explored the pros and cons of UK investment, the various experts did just that, in a sometimes hot back-and-forth discussion.
"The UK is a world-class investment destination with strong top-down economic reasons to be on investors' shopping lists," countered Peter Gray of The Wellcome Group. Valente, in his turn agreed but pointed out that timing was the key.
"It's pretty difficult to see the value there now," he stated. "On a risk-adjusted basis, it's pretty hard to make a case for the UK over Washington, DC or New York." For the meantime, UK investment should be reserved only for "sovereign wealth funds or high-net-worth individuals."
But there is a ripple effect for the great number of investors who don't fall into that category, according to Credit Suisse's Max von Hurter: "People looking to deploy capital will have to go elsewhere."
The conversation took a broader turn when the subject of REITs came up as possible investment vehicles, and the panelists focused more on the pros and cons of public investment and less on those of the UK. "It becomes an issue of volatility," said Valente. "I'm not sure the private market is more volatile than the public markets."
von Hurter agreed, "It's important not to forget the value destruction that REITs experienced," in the downturn.
"That was tough," stated Gray, "but at least investors had the chance to get out."
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.