– Against a weak macro-economic environment, investment grade fixed income yields are and will remain ultra-low
– Fixed income is now more a dying asset class than a no-brainer for asset allocators, and real assets offer investors higher yielding solutions
– Thanks to superior cash flow characteristics and capital value preservation, diversified residential, in Europe in particular, is an excellent substitute for fixed income
– There is a 250-300 basis point yield spread compared with an average ten-year government bond yield
– With inflation concerns rising, residential is a good natural hedge thanks to explicit rental indexation
– Looking ahead, European residential will emerge strongly from COVID-19
– Post COVID-19, European residential markets offer investment opportunities across the risk spectrum … but investors need to rely on experienced and well-resourced managers to reap the benefits of this large market