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 gathered from his online meetings, conferences and other wanderings.

For over 20 years, my role has offered me the opportunity to visit, almost continuously, property companies, strategic investors, asset managers, analysts, brokers, bankers 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. Real estate is a handshaking industry – though it feels like a long time since we actually got to do that. Despite meetings now being virtual, the dialogue has continued with investors, and strategic issues are being discussed and addressed.

Heard from the head of real estate investment at one of the top five European long-term investors during a catch-up call: “It is not the right time to have a strategic decision on the agenda of our committee. Today, our asset allocation is the outcome of the different decisions we make alongside our long-term partners. If it makes sense for them and with them, we tend to do it – then it will have impacts on our asset allocation.” My takeaway is that 2021 is not going to be the year of transformational investment decisions but of ongoing business with familiar counterparts. More evidence of a risk-off market.

Heard from a seasoned real estate M&A banker: “Office is the new retail. The asset class is going to derate and require stronger balance sheets to operate more vacancies, shorter leases and riskier pipelines. Today, we stand for offices where we were for retail three years ago – there are strong disruptive trends and they remain unnoticed.” I am an optimistic person and do not want to take this omen for granted, but a performance pattern in the listed property sector with clear anticipatory features surprised me. In October, a month of bad news on the pandemic front, the worst performances in the European listed sector were office property companies, with several of them experiencing double-digit declines in just one month. Adapting investment, asset management and financing strategies for offices is a must-have. Any real estate player needs to have updated its plans for offices.

Heard from a US activist investor: “I told you, Philippe!” Unibail-Rodamco-Westfield, the leading shopping centres player, has been challenged by a consortium of investors that hold around 5% of the capital. I will not comment here on the merits, risks and costs of the ‘reset’ plan (the board and the management proposal to generate €9bn of additional liquidity) versus the ‘refocus’ plan proposed by the consortium of investors. The main point here is that this is the first campaign of its kind by activist investors in European real estate. Of course, we already saw Laxey Partners challenging British Land in 2002. But this time it clearly resembles the strategies of the likes of Land & Buildings in the US: a vocal and documented campaign to influence a strategy. My advice for real estate companies with a large group of stakeholders: get ready, the activists are at the gate and in the current uncertain environment, more boards of directors and management teams will be challenged.