A view of East London from an aerial view. As the sun sets, the skyscrapers of the Canary Wharf are occupied – London’s second business district.
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Opportunity for investors seeking to seize distressed real estate assets in the wake of the coronovirus epidemic, according to one of London’s leading real estate investors.
Montage Real Estate founder and CEO Thomas Balashev said real estate has been affected unexpectedly during the recession, creating opportunities for buyers as the economy improves.
“I think it goes without saying that there will be a lot of opportunity,” Balashev told CNBC’s “Squawk Box Asia” on Tuesday.
A different kind of crisis
Balashev said that unlike the 2008 financial crisis, which was directly linked to the US housing market and enabled opportunities for some to “get ahead of it,” the current economic crisis closed the market.
He said, “If the way you are experiencing an epidemic sees both political and devastating effects, financially it surprises a lot of people.” “So a property that should not be really distressed, should not have such a significant drop in value, suddenly come into the market.”
The global property market has been hit hard this year by shifting demand for commercial real estate, such as office and retail space, and shifting residential property demands, as homeowners switch cities for the suburbs.
Nevertheless, there are deals that take place around the world, emphasized Balashev, who recently joined a Luxembourg-based fund focused on acquiring distressed real estate assets in Europe, Asia and the UK.
“If you’re a liquid buyer and you’ve got a deep pocket, there’s going to be a huge pile of opportunity and not in one, fixed continent.” “I think this is a great time for real estate globally.”
Indeed, London-based Montague Real Estate, which deals predominantly in off-market transactions in the Prime and Super Prime property markets, has seen a spurt in inquiries from investors this year. This includes 200% to 300% year-on-year growth, which is why investors in Asia are interested in the UK
“We have to take this as a positive sign that people in international markets are still seeing London as a safe haven,” he said.