Homeowners are swapping offices for student housing because the epidemic is changing rapidly

The world’s largest real estate agent is disrupting its $ 378bn real estate deal.

The move from Blackstone – the sale of BNY Mellon’s London office in St Paul to Italian General Insurance for $ 465m, closed this week according to people familiar with the deal, as well as a way to buy a GCP Student Living student housing developer – is a sign of how the homeowners are living in their area while the plague is accelerating its movement.

Covid-19 has accelerated the decline of the two segments of the business model – retailers and offices – and urged homeowners to reserve other options that they think will work best.

At the top of their shopping list are: stocks, backed by ecommerce; dormitories and dormitories, beautiful due to the shortage of housing and the large number of students in Europe; and schools of life sciences, encouraged by significant investment in research and development.

“These are the megatrends that have been. . . has been aggravated by the outbreak, “said James Seppala, European chief of Blackstone.

Ten years ago, offices and stores accounted for about 70% of all European real estate sales, according to Real Capital Analytics. This year they account for 35 percent, while residential and consumer shares are finding land.

Mike Prew, a researcher at Jefferies, said the epidemic helped “transfer profits” from sales to “beds, meds and sheds” – housing, health care and biosystem facilities.

Life science strikes a chord

What fascinates bag managers is the science of life – a place where high prices are crumbling as entrepreneurs look to buy or build high schools near educational institutions in Europe.

In May, Oxford’s Magdalen College put 40% of its value on Oxford Science Park on the market, valued at about $ 100m – more than five times what the college paid 50% of the park in 2016.

“You have a lot of people who want more, less money and more money. Is this the fastest growing segment? Absolutely, “said Simon Hope, head of global markets for Savills agent.

Goods go from ordinary offices to complex labs. A great carrier of wood and space. “It’s a ‘genius loci’: it’s high schools, it’s talent,” said Hope. The hottest spots in the UK and Europe are located in the so-called “golden triangle” between Oxford, Cambridge and London.

“International economists, mostly from the US, are trained in the UK because we have the top 10 universities: Oxford, Cambridge, Imperial and University College London,” Hope said.

According to Bidwells, a £ 2.4bn investment in life sciences in the region by 2020 and those who are still trying to raise double the amount.

“We are spending too much time in the life sciences. . . It has already been made in much of Europe and the UK in particular. With the increase in research institutes in the UK there is a great deal of opportunity, ”said Brad Hyler, who manages $ 38bn as head of European retail in Brookfield.

Brookfield owns half of the Harwell life science camp just south of Oxford, and last month the Canadian financial club paid TPG Real Estate Partners 714 million pounds for Arlington, a financial and professional group with a wealth of gold in gold.

But according to Hyler, the real opportunity is to build labs and compasses from then on. Brookfield is looking at development around European cities in “Germany, Switzerland and elsewhere”.

Storage space

Another relatively new site for retailers and events, where the popularity of online shopping has strongly encouraged the search for warehouses.

Through Mileway’s largest company, Blackstone has acquired more storage facilities near European cities, with Brookfield spending more than € 1bn last year and making history in France, Spain, Germany and Poland.

Reimbursement for those who live in retail outlets has been very successful during the epidemic, and the search for land has been an opportunity for companies in the area.

While the shareholding of UK landlords, such as Britain Land and Land Securities, is between 20 and 30% from pre-Covid level, and Hammerson’s real estate owner has lost three shares, Segro’s real estate developer is 16% .

Living space

Advertisers also bet on accommodation, preferring rental housing and student accommodation.

“Look at these big cities in Europe: they are big business places with a lot of housing and a lot of stable economy. It creates a good opportunity, “said Mark Allnutt, director-general of Greystar, a U.S. real estate broker who recently raised € 725m to operate in Europe.

“People want to live in Amsterdam and London and there are not enough homes in these cities,” added Seppala.

Undersupply is another element of the academic school market, which should help pull the trigger as a result of the disruption caused by the epidemic, Hyler said. Brookfield, which owns Roost Student Roost, is planning to raise funds for this country.

Offices and stores make up more than half of Europe’s retail sales, according to Real Capital Analytics. As the population grows in the stock market, entrepreneurs acknowledge that there is a risk of overpayment.

In contrast to the economic crisis in 2008, the epidemic did not cause much of the stock market damage. But if banks are patient with troubled homeowners, chances are they will gamble out, says Guillaume Cassou, head of Europe’s largest trading company KKR, which has just closed its $ 2.2bn fund for western use. Europe.

“The key part is playing offensively and defensively right away,” he said.