JUNE 2017 Expanding the European Universe

Following our Q1 2017 report, we have now doubled our universe of real estate markets from 50 to 100. This expansion is focused on including the 100 most liquid local European markets. In fact, the average investment volume per market segment over the last five years is EUR 4.2bn across our 100 markets, while the minimum amount of investment volume for a market segment to be included in our 100 universe is EUR 180mn over the last five years. In our view, this offers sufficient choice for investors. We follow the same three-step analysis as in our Q1 report:

1) Our proprietary market scoring now ranks the 100 most liquid markets in the European investment market based on four equally weighted drivers: economics, liquidity, risk and return

2) The market scores are used to limit the universe from 100 to 42 markets to provide investors with a more manageable and attractive universe

3) Optimal portfolios are constructed based on the 42 market universe to meet three different risk-return profiles

 OPTIMAL PORTFOLIO ALLOCATIONS

Source: AEW

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The information and opinions presented in this research piece have been prepared internally and/or obtained from sources which AEW believes to be reliable; however, AEW does not guarantee the accuracy, adequacy, or completeness of such information.

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Hans Vrensen
Head of Research, Europe

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