What do investors want right now? Which are their preferred opportunities, and what do you need to know about them? This series sums up what one European investment adviser has gathering in his virtual wanderings.

For over 20 years, my role has offered me the opportunity to visit, almost continuously, property companies, strategic investors, asset managers, analysts and brokers as well as pension funds or insurance companies throughout Europe. These interactions with the decision-makers of the European real estate industry could take the form of a simple meeting in their office, or roadshows, property tours, investor days, conferences or fairs like MIPIM or Expo Real. First and foremost, these meetings are regular social interactions that enable us to do business and to share views and convictions on the economy and the property markets. Despite meetings now being virtual, the dialogue has continued with investors, and strategic issues are being discussed and addressed.

Heard from the principal of a London-based global hotel real estate player during a catch-up call: “For hotels, the demand is going to remain low for 18 months at least, but I am worried about supply. We might have built overcapacities in some European markets. Just this last two weeks, I have received four different opportunities to finance existing hotel developments in Lisbon.” As in any crisis, the focus is first on demand and, in this crisis, demand is likely to be weak. The trump card to win across the different property markets is to get it right on the supply side, with the impact of the new dynamics at play: retailers vacating shops, coworking operators offloading some space, the development pipeline to be revisited for all asset classes.

Heard from a tier one European asset manager: “There are only two points on the agenda of our next management meeting: one, the new initiatives to implement to be safer in this crisis; and, two, where should we focus our team and our capital in the coming years to benefit from this downturn?” As with this investor, my impression is that the first focus is defence: anticipating refinancings, finding solutions with tenants, increasing the disposals programme, reducing costs… Nevertheless, investors are also keen to attack, to identify where the opportunities will be, being realistic that with the amount of liquidity that has been injected by the states and the central banks, there will be some time before we see the real opportunities. When the cost of carry is low, there is not much action on the opportunistic front.

Heard from a French insurance company: “In the past few years, because of M&A, our exposure to the listed sector has shrunk. Our investment committee has backed a €150m new investment and we target large caps with some strict limits on our entry prices and try to avoid the riskiest situations.” This investor leads the way. It is time to deploy capital in listed real estate, as share prices are essentially down (except for German resi and also logistics), levels of debt are under scrutiny but remain largely under control and steep decreases of values are already priced in. Take offices in Amsterdam or Brussels: you can buy them in the stock market at implied net initial yield of over 6%, when they trade around 4% in the direct market. As the Economist mentioned on its front page, comparing Wall Street and Main Street: “The market vs the real economy. Something has to give”.