According to Barings' Nick Pink, the European real estate investment landscape is shifting significantly as we approach 2026. As core capital returns to the market, value-add strategies will face stiffer competition for funding. Core capital, known for seeking stable, low-risk assets, is re-entering the European market, which will likely crowd out value-add strategies that focus on higher-risk, higher-return opportunities.

This trend suggests that value-add funds will need to work harder to secure investor commitments. For investors, this means a potential rebalancing of risk and return profiles in their portfolios. The return of core capital could stabilize asset prices but may also compress yields for those seeking higher returns through value-add projects.

This shift highlights the cyclical nature of real estate investment and the importance of adapting strategies to changing market dynamics. The report underscores the need for fund managers to articulate clear, compelling value propositions to attract capital in an increasingly competitive environment.