“Certainly, some people should be careful. But we are also seeing larger retail assets being bought by domestic investors,” Ludwig said. He pointed out that the company had acquired a shopping center in Hamburg.
practical approach
Family offices may function like larger institutions by setting up special purpose bodies or appointing wealth managers.
But on the ground, it’s a slightly different story, Ludwig explains, where private capital can often handle the day-to-day management of a single retail asset.
“While we see some retail properties being handled by third-party asset management companies, properties such as high street retail properties are simply managed in-house, with day-to-day caretakers and managers. It’s often staffed,” she says.
Mr. Ludwig said that offices, which are often located on upper floors due to hybrid work arrangements, are experiencing major disruption, but depending on the cost of capital investment and rent, some private investors are moving into less prime locations. He said there is an opportunity to consider converting the site into apartments.
“That remains to be seen, but I wouldn’t doubt the ability of private capital to undertake redevelopment and conversion in such a scenario,” Ludwig said. “We have the development expertise to bring new, more versatile concept ideas to life.”
More broadly, it remains to be seen how big a role private capital will play in retail real estate over the coming months.