The Case for European Long Lease – diversifying Irish property holdings.
The Continental European real estate market is set to keep changing, not least as Irish investors mull the implications of the UK voting to exit the European Union and persisting loose monetary policy. Inflation linked income streams are particularly attractive in the current low-yield environment as these long-term investors struggle to meet their cash flow matching requirements through the traditional fixed income investment strategy.
Continental European long lease property seeks to meet the existing and ever growing demand for lower risk income producing euro denominated, European real estate assets. The ability to deliver secure, long-term and inflation linked cash flows by investing in a diversified portfolio of core real estate with rental revenue from institutional-grade tenants is a key benefit. By exploiting the bond like characteristics of real estate, and diversifying their holding across countries, markets and sectors, we believe this can reduce investment risk and generate reliable long-term yields that they need to continue paying liabilities.