The European real estate investable universe is large, totalling some €2.5trn.
Risk-adjusted returns relative to other asset classes are favourable and, in today's low yielding environment, its high-income component is attractive.
That said, with yields at record lows in many European cities and the prospects of an economic downturn looming, some investors question whether now is the right time to enter the late-cycle market.
Yield compression is no longer a strategy to rely on, even in a lower-for-longer world.
However, careful selection of locations and assets benefitting from thematic changes, such as industrial or social clustering or transformation of local infrastructure, may permit the identification of relative value.
In addition, analysis of the MSCI index shows, over the past 25 years, more than three-quarters of pan-European property returns have come from income - essentially, rents.
In the current climate, we see opportunity in resilient pan-European economies and diversified, liquid markets such as Germany and France.
Because office availability in major Western European cities is tight and occupiers are being more discerning on quality, prime offices in dynamic cities such as London, Munich and Madrid are attractive.
We expect the ongoing occupier flight to quality to continue even if macroeconomic conditions weaken.
Structural changes are creating new types of occupational demand, which will support selective rental growth regardless of macroeconomics.
One example is rapid demographic change, which is fuelling urban densification.
Another is technology, which has led to rising warehouse demand to service the growth of e-commerce.
A third is new transport investment, such as London's Elizabeth Line or the Grand Paris Project.
Well-located offices in major cities are interesting given their potential to capture rental uplifts.
Conversely, offices that are poorly specified, situated in submarkets with poor connectivity or in weaker secondary cities, may see accelerating value erosion and should be avoided.
Unlike equities, real estate is a tangible asset where active management can create and grow income, helping deliver returns through the cycle.
Maureen Mahr von Staszewski is a senior pan European fund manager at Swiss Life Asset Managers
• Real estate's high income appeals in low-yield environment
• Active management can create and grow long-term income
• European economic downturn clouds real estate outlook
• Property in weaker secondary cities should be avoided