real estate

Real Estate Investment Funds, or Reifs, in Luxembourg saw total assets climb by 26 percent in the year running up to the end of the third quarter, to 131 billion euro. The number of Reifs increased by 20 percent to 621 funds.

The latest edition of the Reif survey conducted by the Association of the Luxembourg Fund Industry, or Alfi, showed that multi-sector allocations remain the most popular strategy for Reif investors, with 49 percent.

BlocHome, a Luxembourg blockchain real estate investment platform, has arranged a guarantee that will allow it to finance the first security token-based residential project in Europe, an eight million euro housing project in Luxembourg known as the “Clapton Residence”, without waiting for further fund-raising. The guarantee was arranged after the firms’s first project attracted 2.15 million euros in tokenised investments from 280 investors.

An innovative start-up in Luxembourg is looking to democratise housing markets by tokenising homes. Leveraging the blockchain, BlocHome lets its clients partially own the home they live in. On the part they do not own they pay rent. “The more you are owner, the less rent you have to pay.”

Mortgage rates and home prices are skyrocketing worldwide. That is not good news for housing affordability.

The graph below shows the relationship between the one-year change in US 30-year mortgage rates and the one-year change in the ‘Housing Affordability Index’. Roughly speaking, the change in mortgage rates explains about 40 percent of the change in the affordability of a home for sale in the United States. 

If there is one economic lesson my father, a construction engineer, taught me, it’s that mortgage rates in Europe always follow what’s happening in the United States. When rates go up across the Atlantic, they’re bound to do the same in our part of the world. So when it comes to locking in a good mortgage rate, look west.

Luxembourg’s real estate investment sector has recovered strongly from the economic slowdowns caused by the ongoing global Covid-19 pandemic, according to figures released in the Association of the Luxembourg Fund industry’s (ALFI)  15th annual Luxembourg real estate investment funds survey. (Full version link below.) 

When investing in unlisted real estate, funds that focus on a single country or on a separate sector within a country outperform funds that diversify across countries and/or sectors, according to a Cambridge University study. By contrast, real estate funds that focus purely on one sector do not outperform diversified funds. This research was named the best of 2021 by industry body Inrev.

The warning that climate-related damage will be more difficult to insure is growing. A challenging time is coming for real estate investors, as their investment horizon becomes riskier.

Bond investor Pimco is also increasingly looking to alternatives to traditional bond categories. The fund house sees attractive income-generating opportunities in real estate and private credit and plans to continue investing in these areas. 

That is what Pimco wrote this week in its outlook for the coming years. The asset manager, which invests primarily in bonds, recommends working with flexible mandates in order to be able to make use of the full range of fixed-income opportunities. 

The pandemic has put the resilience of the big city in the spotlight. The need to protect cities against the challenges of this century remains as great as ever. Schroders is therefore investing in real estate projects in the cities of the future. They are looking for players who push the boundaries and take the most drastic steps towards “net zero”. How? In this case, with a python script and a big database.