HansaInvest: ‘Interest rates are not going up, but inflation is difficult to assess’

Hamburg-based real estate investment company HansaInvest is not changing its strategy despite signs of rising inflation and a possible hike in interest rates, speaker of the management board Nicholas Brinckmann said at Expo Real on Monday.

‘There are some who argue that the inflation we see is temporary. High prices in construction could be a matter of supply shortage and nobody knows what will happen to the price of gas,’ Brinckmann said.

Against this backdrop, HansaInvest’s stategy has not changed, he noted. In the logistics market the company will keep investing and increase its portfolio. ‘We are active, we are investing and we are always looking for partners,’ he said.

In other sectors HansaInvest is using current market circumstances to sell some assets, like an office in Brussels and in Frankfurt. ‘We had a mixed-use asset at Schiphol in the Netherlands which we first wanted to redevelop,’ Brinckmann said, ‘but that didn’t work out so we sold that as well'.

These sales are partly driven by things picking up after a slow period due to Covid. ‘Not much was happening and the market was uncertain,’ Brinckmann explained. However with the market back in good shape it was the right time to sell some assets.

HansaInvest is only interested in prime real estate. ‘We don’t buy in secondary cities or fringe locations,’ said Brinckmann. ‘Location-wise we do not compromise. In times of crisis prime real estate holds up the best.’ That also applies to logistics, arguably a sector where there is mounting pressure on yields. ‘How low can it go!’ Brinckmann exclaimed.

Brinckmann said he is carefully watching for signs of market saturation. Overcapacity would certainly be a sign, as well as further yield compression in the cycle. As long as things are on an upswing, the difference between the prime yields of core and fringe assets is narrow, according to the German executive. ‘But if the gap broadens, that is a clear sign: investors beware!’