Savills IM:  Asset protection and selective European growth

Robust active asset management and rigorous capital preservation take precedence over aggressive portfolio growth as real estate markets adjust to recent interest rate shifts, according to Gerhard Lehner, head of Germany at Savills IM.

Gerhard Lehner

Speaking at EXPO REAL in Munich to CRE Media Europe, he highlighted that investor loyalty and stable distribution returns remain the primary safeguards for institutional capital during a period of macroeconomic recalibration.

Savills IM manages approximately €4.7bn in equity on behalf of 75 German institutional investors, with two-thirds of that capital deployed across broader European markets.

Savills IM continues to raise and allocate equity targeted at resilient, income-backed asset classes.

Logistics is delivering distribution yields between 5.5% and 6.0%+, providing an attractive yield differential in the current interest rate environment.

Food retail is prioritised for its long lease structures, defensiveness, and income security.

Savills IM is selectively targeting top-tier prime office assets in prime locations across key financial hubs such as Paris.

Finally, the company is expanding its focus on Residential & Living as distressed vendors adjust pricing expectations, unlocking entry points into European residential markets.

"It's not the time of huge growth," Lehner explained. "As we are very deeply in all European markets via our European network, we always find good opportunities... Sourcing off-market opportunities from vendors under pressure allows us to pick out the good deals and steadily grow our business."

Germany and pan-European reach

Germany remains a core market for the platform, supported by low national government debt and a diversified, federalised economic base.

At the same time, Savills IM is maintaining a flexible, cross-border approach. "All Western European countries are in our focus because you can ride the cycles," he emphasised. "Sometimes in a certain sector you go over there, and another time in another country something emerges. It’s tactical what we are doing across Europe."

Pragmatism and value creation

Reflecting on the sentiment at Expo Real, Lehner noted that a period of market realism has replaced speculation. While elevated interest rates continue to temper short-term market acceleration, active portfolio rotation and disciplined management remain central to long-term performance.

Looking ahead through volatile conditions, he expects capital deployment and deal flow to pick up gradually as market stability returns.

Branislav Pekic