Pictet Sees Selective Property Opportunities Across Europe

Pictet Alternative Advisors (PAA) focuses mainly on logistics and residential property, which Ed Jackson, its head of UK Direct Real Estate, describes as “sheds and beds.” The firm has $61 billion in total assets and $5 billion in real estate holdings across direct and indirect strategies, as of 30 September 2026. Its residential strategy favours multi-family properties in large urban areas, while its logistics investments include industrial estates and warehouses.

Jackson said UK residential property has become “very difficult and almost non-viable.” He cited the Renters Rights Act of 2026, which bans no-fault evictions and fixed-term tenancy contracts, as well as higher mortgage rates, tighter planning requirements and increased taxes on private landlords. UK residential exposure, prominent in PAA’s first value-add fund, Elevation I, has been reduced in Elevation II. The first fund invested across 15 strategies and deals. PAA funds typically run for eight years, with capital deployed during the first three.

PAA is assessing residential opportunities in Copenhagen and Madrid, where Jackson said the market is booming. The firm has also recently bought apartments in Milan. Its target returns are at typical value-add levels: more than 15 per cent net internal rate of return and a 1.5-times money multiple, Jackson said.

Broader conditions remain uneven. Aberdeen Investments reported that continental Europe’s annual total return slowed to 5.2 per cent in the year to June 2026. Southern Europe, Ireland and Denmark led performance, while France returned 4.6 per cent and Germany 2.9 per cent. The firm said higher bond yields and financing costs are likely to weigh on valuations, despite inflation-linked rent adjustments. Capgemini’s World Wealth Report 2026 said real estate represented 19 per cent of the average high-net-worth individual’s portfolio as of January.

PAA also looks for off-market deals through its network and Pictet’s wealth management business, Jackson said. He cited transactions involving ultra-high-net-worth families, including a client seeking to sell an office without placing it on the open market. Office prospects vary sharply: prime central buildings in major cities remain sought after, while properties outside those areas can offer cap rates as high as 10 per cent, but require specialist experience. Aberdeen said construction of UK office space is 37 per cent below its peak. Vacancy is around 3 per cent in Madrid and below 5 per cent in central Amsterdam; Paris central business district vacancy has risen to around 6 per cent.