UBP flags operational real estate as value driver as higher rates pressure property valuations
XLRE•Union Bancaire Privée expects elevated long-term bond yields to weigh on property valuations over the medium term and highlighted operational real estate as a preferred approach.
1. Real estate outlook
UBP said a new European real estate cycle began in 2022, marked by sharply higher yields and falling transaction volumes. It said traditional core real estate faces limited near-term upside and a sustained recovery through yield compression is unlikely, while highlighting luxury hospitality, high-end U.S. multifamily and distressed repositioning opportunities in operational real estate, which carries higher operating risk.
