So is the 25 yr Old U.S Model Relative In Europe Today ? Well we have seen a very interesting parallel to were the United States multi-family market were 25 years ago relative to where some of the European markets are today. Many feel that we will jump forward and be exactly as things are in the United States today.
However there are some fundamentals which do translate, such as provision of customer services , creating a market differentiation, offering to your mainstream or privately owned Market competition.
When you get into the granularity of services within the service provision. Which are seen as very much a part of what you have to now do to create this bill to rent multi-family offer in Europe as well as the in the U.S.
We should be looking at those levels of services, people will be willing to pay for. For example in the Cold Weathered UK a swimming pool is not going to be used everyday and an indoor swimming pool is going to be too costly to install.
However, other services such as storage facilities, taking in parcels, having on site staff and maintenance as well as thinking about your tenants as customers, as opposed to thinking of them as someone that pays you rent, are all key fundamentals and things that we can learn from the U.S.
What To Expect And How To Invest
As the European market becomes more evolved we will most lightly see more buildings with these kinds of services available. One of the key things companies like Invesco has learned from their previous experience is that you might need to build into your buildings in order to give you the ability to adapt them as the market changes.This will give the investor the ability to compete with the competition.
For example a new building just down the street having the newest and next big thing and you don’t have the capacity with your own building to potential replicate that.
This is one of the main considerations that should be taken very seriously when investing.Invesco for example, is focused on acquiring entire buildings making sure that they can control all the immunities within those buildings so that in the future they will be able to move forward as the market undoubtedly will.Invesco has also been acquiring building build around twenty years ago then brings them up to today’s market standards.
As you don’t see these kinds of building within the EU we can safely say we at ground zero. So when building or acquiring property keep in mind that in 20 years or so you might have to bring them up to the current market standard of the time. The building might not be obsolete but some of the services might become outdated.
We consider those to be the key drives and lessons that we can learned from the U.S.
Thanks for reading