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Deutsche Bank: Expect Lower Real Estate Returns


Investors should expect lower returns and more M&As in the later stages in the real estate cycle, Deutsche Asset & Wealth Management says. Today's environment is tougher, director and head of strategy for the Americas Kevin White says, so investors "have to be more discriminating." Kevin recommends office and industrial properties.

Apartments also have strong demand with falling homeownership rates. "It's also seen the most construction and pricing is more aggressive," Kevin says. Even with a challenging environment, returns will still be strong, he says, just lower than in the past, at around 7% to 7.5% rather than 9%, the average return over the past 30 years. [P&I]

Related Topics: TPG, Deutsche Bank, Kevin White