Investors “Cannot Ignore” U.K. Real Estate, Charls Says

Philip Charls, CEO of the European Public Real Estate Association (EPRA), joined REIT.com for a video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.

Charls commented on the impact of Brexit on European commercial real estate. He noted that while U.K. total returns, as measured by FTSE EPRA/NAREIT indices, were weaker than the rest of Europe on a year-to-date basis, returns were much more closely aligned over a five-year period.

Furthermore, current dividend yields are about equal on both sides of the Atlantic at 3.8 percent, according to Charls.

“In the low interest rate environment that we have, you can argue that investors cannot ignore the U.K. market, regardless of the outcome of Brexit,” he said.

Meanwhile, Charls said 2017 is an active year for Europe on the political front, with elections scheduled in France, the Netherlands and Germany.

“We might be in for another black swan event like we’ve seen in the U.K. and the U.S. It’s very clear that there are a fair number of people who feel left behind after the global financial crisis,” he observed.

Charls also highlighted some of EPRA’s 2017 priorities. They include further development of REIT regimes in Europe, Charls said. Twelve European countries, representing 83 percent of European GDP, have implemented REIT regimes, he noted. Work still needs to be done to bring Portugal, Poland and Sweden into that group, Charls said. He added, however, that he was optimistic that Poland could reach the goal by the end of this year, or early in 2017.