The third panel at the Investment Conference 2024 hosted by Kamco Invest and @BurganBankChannel. The panel was moderated by Hassan Farran, Chief Executive Officer of Kamco Invest - London and panelists included Borja Díaz-Llanos, Global Head of Alternatives at Santander Asset Management, Marc Feliciano, Global Head of Real Estate for Private Markets at Manulife Investment Management, and Mohammad Al Othman, Executive Director of Alternative Investments at Kamco Invest.

Hassan Farran looked back on the past three years and some of the structural changes that have happened, particularly in the way commercial real estate is being utilized by its tenants. High investment activity in the region and attractive investment returns were mentioned as some of the key challenges to international real estate investment. Real estate private debt was highlighted as an investment segment that has offered very attractive risk-adjusted returns over the past two to three years with high global demand for such investment products, evidenced by the amount of capital raised for debt funds in the US and Europe.

The panelists agreed that 2024 and 2025 offer a great opportunity to enter the international real estate investment market – both on the equity and debt side – following a significant correction. However, they emphasized that the opportunities lie within certain sectors, while also relying on investors’ agility and deal-structuring abilities.

Borja Diaz-Llanos said, “The European real estate market has suffered a drastic shock and transformation over the last few years. It currently offers a very attractive entry point for opportunistic debt providers, and equity investments in certain subsectors.”

Marc Feliciano said, “We are riding a wave of debt maturities in a higher rate environment over the next few years while we continue along a path to price and risk discovery. This challenge presents opportunities to extract value through structured debt and equity as existing capital structures that are broken are recapitalized, and acquisitions or developments are capitalized.”

Mohammad Al Othman said, “Although the past few years have been challenging for asset owners, looking forward, we are excited about the investment opportunities we are starting to see in the international commercial real estate markets. We are finding price dislocation for high quality assets in certain markets, and we believe that this window of opportunity will narrow once markets start to correct as interest rates begin a downward trajectory, which we expect them to do later this year.

On the private credit side, due to the high interest rate environment and the withdrawal of some of the traditional lenders, the market has opened for Kamco Invest to deploy capital into a sector that previously was not very attractive in terms of returns given the low interest rates at the time.”

@TheEconomistIntelligenceUnit