What's the job market like in Europe?
Any of you based in Europe? Curious what deal flow is like and if you're able to compare it to business done in the US. is there a space for boutique developers too?
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Based on the most helpful WSO content, it seems like there's a vibrant job market in Europe, with opportunities in various sectors including finance, consulting, and more. However, the specifics of deal flow and the comparison between business done in Europe and the US isn't something I can provide insights on based on the current WSO dataset.
As for boutique developers, there's always a space for specialized skills and services in any market, including Europe. But again, the specifics would depend on various factors like the exact location, the industry, the demand for such services, and more.
I'd recommend diving deeper into the WSO forums or reaching out to professionals in your field of interest for more detailed insights. Remember, knowledge is power, especially when it comes to making career decisions!
Sources: Online internship at an U.S boutique, from Europe?, Planning on moving to Europe, Q&A: MBB project manager in Europe
American anecdotes but speaking for the UK I think its very tough right now unless you're coming out of an IB or Oxbridge. as far as boutique developers I think this is extremely rare - there is not nearly as much middle/upper middle class money or self made families to form equity partnerships and pursue developments. I think most are extremely well capitalized. In addition the entitlement process is extremely long and I imagine is very jurisdiction to jurisdiction dependent. That's already difficult in the US from state to state but imagine it across different countries.
Thanks. I'd really love to take my career to Europe for some time but it sounds like the market is just too small compared to the US.
What would be the biggest asset classes offering the most work? Do you know much about the multifamily space?
The market definitely exists, but mainly at large institutional allocators.
Again this is my anecdotal experience but European residential is very old and fragmented. its not like the US where all the Sunbelt cities were built really in the past 50 years and so there's 100 or so multifamily developers out there printing out 300 unit complexes here and there. I'm sure it exists its just a smaller scene. Industrial is extremely hot over there but probably at the end of its cycle. Office is probably in a better place over there than in the US but they also ahve an extremely weak economy relatively. Elite retail is still strong - probably less so outside of the major cities.
Would love to hear an actual European chime in here.
Can't comment on Europe's residential market but can on office and industrial.
For background I am an American that have had 2 years work experience at one of the big brokerages in the US and recently moved as an expat to the Netherlands 2 months ago to take on a financial analyst role working at small REIM shop covering office & industrial funds throughout the Benelux, France, Germany.
To compare from my experience in the US to what I am experiencing now as an analyst in Europe is a few things.
- you can't assume one country's economy, legislation, market standards as the same throughout the continent. Each country is quite different RE businesswise even when they're neighboring borders. like don't assume return to office in Germany is the same as in the Netherlands - different work environments and commute times and wfh was a common Dutch trend prior to the pandemic for example
- Industrial like everywhere else is hot. On a market level we have seen about a 20-30% drop in NAV across the board from 2021 - H1 2022 peak levels. For the warehouses in my company's industrial fund, we have seen only a marginal drop in multi-let, small warehouses (under 50,000 sq ft) in comparison to big-box warehouses which had a larger value decrease. Curious if anyone in the US markets has observed a similar trend?
- Not sure where the poster above is referring to industrial being at the end of its cycle in Europe - do you mean you believe values have stabilized from peak pricing? If that's the case, we do believe we have reached the bottom of the market and asset values will increase a bit from where they are now. We have a similar story like the US of demand being strong and supply being tight further increasing our market rent projections. Challenges on approving building permits in the Netherlands and Germany further supporting this trend.
- Agree with the above poster about office faring better than the US market. As stated from the first bullet, better commute times and wfh trends pre-pandemic were more widely accepted (in the NL in particular). Also important to note most office workers take public transit to work where it's efficient and it's a norm here for companies to reimburse you for all travel expenses when commuting to the office. Office occupancy levels per week hover 80% over here.
- Not sure what the above poster is referring to an "extremely weak economy". Western European countries average around 1.75-2% GDP. If we're thinking of a Southern or Eastern European country, obviously very different story.
Happy to shed further light on this for anyone curious about the Europe RE market from an American expat's perspective.
Hi thanks for sharing! Just curious what would be the best way of learning the nuances between European market (like leases, etc.) without actually doing a deal?
I’m joining a MF REPE in June and would like to build up my knowledge in the mean time to have a smoother transition - I come from a banking background with almost no RE experience. Any tips are welcomed, thanks!
(About to start the A.CRE accelerator programme if that matters)
A bit different terminology they use and of course different market standards per country.
I can name a few off the top of my head...
ERV -> market rent
theoretical rent -> contractual rent
passing rent -> rent collected
over/under rented -> above/below market rent
investment memorandum -> offering memorandum
void -> downtime
pvc -> solar panels
Leases are normally indexed each year based on month of lease commencement. So if there was 6% of inflation in a year, then a lease will typically be indexed 6% to keep up with growing operating costs (I've seen this in both office and I&L).
Break options are normal in a lease where the break date is a few years before the lease expiry date and the tenant has the right to break the lease and if they choose not to exercise their break option, tenant normally gets rewarded fiscally by free rent granted in the lease duration.
It's market standard in Germany, Netherlands to have lease terms for 5, 7 or 10 years while it's market standard in France, Belgium, Luxembourg to have lease terms for 3, 6, or 9 years.
Leasing commissions are calculated for only the first year of lease so 24%*yr1 market rent = leasing fee
In France the commercial tenants reserve the rights to indefinitely renew and not vacate the premises after their lease expires - they can renew into perpetuity without the landlord's consent.
In I&L, it's typical to have different market rents assigned per use so 60 euros psm p.a. for warehouse component, 150 euros psm p.a. for office component, 1.500 euros per space p.a. for trailer parking component
BREEAM ratings on assets have become critical to have. This is a commonly recognized energy rating standard that costs ~10.000 euros per property for the survey to be done to assess its green rating. Criteria to have a good score includes property manager and reporting organization; insulation; smart meters to track energy usage; average amount of kilowatts utilized per hour. Random things that can earn a good rating is for the landlord to maintain a "bee hotel" on the property (mentioned in a CBRE IM for a warehouse in Belgium).
Wow this is so helpful, thanks!
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