Wilbur Ross, CEO of WL Ross, likes what he sees in some distressed European real estate, particularly in Ireland and the Mediterranean.
"Some of the projects that were so ill-considered they never should have been done, those'll revert to farmland," he tells
CNBC.
But, "in the resort areas [of Europe], there's a big influx of outside people, British people, Russian people and German people buying those properties in the resorts. So I think that part is starting to be on the mend," Ross argues.
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European real estate hit the skids thanks to the 2008-09 financial crisis and the European debt crisis that followed. In Ireland, home prices plunged 57 percent from 2007 to 2012, according to CNBC, and in Spain, real estate prices dropped 23 percent from 2008 to 2012.
But Europe's commercial real estate sector is in pretty good shape, Ross notes.
In Ireland, "you can buy a well tenanted first-class building in a big city at a 7 to 7.5 percent capitalization rate. That's quite a good return by European standards or by global standards," he maintains.
Cap rates measure a project's income divided by its value.
Similar cap rates prevail in Spain, he adds, noting that " they tend to not be as fully tenanted. And therefore you have a little bit more upside if you can fill in the rent rolls."
Ross isn't the only one gaining interest in Southern Europe.
Spain, Portugal, Italy and Greece saw 3 billion euros (about $4.1 billion) worth of commercial real estate deals in the fourth quarter, up 100 percent from a year earlier, according to broker JLL (formerly Jones Lang LaSalle),
The Wall Street Journal reports.
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