CapitaLand Investment: European real estate investors need to look East

As institutional investors converge on EXPO REAL 2026, the ongoing quest for portfolio resilience is steering conversations away from traditional domestic boundaries and toward global diversification.

Bernhard Karas

Reflecting on the market environment leading into the conference, Bernhard Karas, managing director at CapitaLand Investment, noted that European investors are still recalibrating after years of macroeconomic volatility, shifting interest rates, and asset repricing. While market confidence is slowly staging a comeback, selectivity remains the guiding principle.

"Investors remain highly selective, with a growing recognition that resilience depends not only on sector selection but also on geographic diversification," Karas observed.

Breaking Out of Home Bias

A core vulnerability in many European portfolios, according to Karas, is an over-concentration within the home region. Because global real estate markets and regional economies are cycling at vastly different paces, locking capital exclusively into domestic assets leaves portfolios exposed to synchronised downturns.

To counter this, CapitaLand Investment is championing the role of Developed Asia as a stabilising force for European institutional portfolios. Exposure to markets driven by uncorrelated return factors can significantly mitigate volatility and enhance risk-adjusted returns.

Accessing regions moving through different economic phases opens doors to growth opportunities unavailable locally.

EXPO REAL 2026 is expected to spark deeper internal debates among European institutions regarding whether their asset allocations are sufficiently spread across varied economic cycles, concluded Karas.