Although property prices have risen substantially over the long term, the sector has been subject to wild fluctuations in recent years. Increased regulation has also complicated processes and increased costs.
Another factor affecting the market is increased competition. “When we first started in this sector, we were one of only a handful of service providers managing portfolios of this nature,” says Rainer Göbel, Managing Director and one of the company founders. “Today, there are more than 70 companies in the sector.”
GLL’s strength is its ability to help its customers achieve their investment goals with tailor-made investments. “We have always had a very strong customer focus and develop strategies and investment funds for and with them,” says Mr. Göbel. “We are in continuous contact with our investors and try to develop property-based investment vehicles together with them.”
The focus of GLL’s portfolio is on the commercial property sector such as office buildings, retail real estate and industrial buildings. Since 2002, the company has invested over twelve billion EUR in Western, Central and Eastern Europe, the United States and Latin America.
“We currently have some seven billion USD in assets under management and a portfolio comprising over 100 properties,” says Mr. Göbel. “We manage these assets through offices in New York, San Francisco, Orlando, Santiago de Chile, Budapest, Lima, Brussels, Paris, Madrid, Warsaw and Luxembourg. Property is a local business that requires a presence on the ground to liaise with tenants in their own language. As an independent service provider, we can respond more easily to customer needs and strategies. We have a very individualized approach which we pursue with our institutional investors.”
This approach is particularly crucial in a property market that is becoming ever more volatile. “Property has become a substitute currency for investments, but because of political situations such as Brexit or the crisis in Spain, returns are sinking,” says Mr. Göbel. “There are tsunamis washing over the market as herd behaviour and pro-cyclical positions take over.”
GLL’s response is to increase its ability to react flexibly to opportunities as they present themselves. “Property will certainly not lose its significance as an investment in the short term,” says Mr. Göbel. “We want to safeguard this by building up a global portfolio of profitable and well-diversified properties.”