10 reasons to invest in European listed real estate

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Editions

1. 10 reasons to invest in European listed real estate
2. 01 Diversification across asset classes adds value to a portfolio
3. 02 Yield spread and risk premium
4. 03 Listed real estate and interest rates
5. 04 Better quality assets
6. 05 Valuation is attractive compared to direct real estate
7. 06 Lower sector volatility
8. 07 Correlation with direct real estate is what investors want and what the sector offers
9. 08 Opportunity to diversify across countries, regions and subsectors
10. 09 Listed real estate is a solid inflation hedge
11. 10 More efficient and liquid than direct real estate

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Editions

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Yield spread and risk premium

We are comfortable with the current level of implied property yields which provide a nice and healthy spread compared to the base rate for financing, such as the 5yr swap rates. The risk premium is still wide based on historical standards and is completely different from what applied before the Great Financial Crisis of 2007-2008.

Quality and well-managed property companies with healthy balance sheets have access to the equity and debt markets at a cost well below yields on new acquisitions or developments. External growth is still accretive and supportive, as long as gearing ratios remain low and balance sheets strong.