Long-income real estate involves buying the real estate asset and generating income through a long-term lease to a proven operator. With yields at relatively high levels compared to recent years, now could be a good time to consider investing.
The prospect of interest rates falling further from their recent highs is supportive of valuations, and indeed, we have seen improving returns in European real estate in recent quarters.
Credit spreads are at historic lows, which means the compensation for taking credit risk is lower than it has been. Long-income real estate can currently offer spreads that not only compensate for credit risk but also an attractive illiquidity risk premium.
