The opportunity to invest in non-performing loans to be sold by European banks has not played out, with still a number of distressed loans that could be sold, mainly from Southern Europe, said Olivier Piani, CEO of insurance company Allianz Real Estate, speaking at a panel at the Urban Land Institute conference in New York.
But he added that it was unknown “at what speed those non-performing loans turn into deals.” Allianz has a €600 billion ($758.8 billion) portfolio with 5% invested in real estate.
The panel also included Goh Kok Huat, president and chief operating officer of GIC Real Estate, the real estate arm of Singapore’s $320 billion sovereign wealth fund, and Jeff T. Blau, CEO at Related Cos. The moderator was Cia Buckley Marakovits, chief investment officer of real estate money manager Dune Real Estate Partners.
The panel also discussed how they assess investments around the globe. Mr. Goh said the GIC analyzes the risks in each country, dividing the world into developed and emerging markets.
“The key difference in emerging markets is that emerging markets are less liquid” than developed markets and so GIC officials expect a premium for investing in the emerging markets, Mr. Goh said.
But not all countries in the emerging markets are analyzed the same way. GIC officials consider each country’s growth potential and point in the country’s real estate cycle. Twice a year, GIC officials consider the relative attractiveness of real estate in each country.
“Real estate in China is understood, but in India we still have to crack the code,” he said.