The Scandinavian real estate market remains a very attractive geography and asset class not only for domestically based funds, but increasingly for European and global ones as well, as they strive to diversify their portfolios as well as seeking new opportunities. However, with this comes the accompanying foreign exchange risk.
At JCRA, as independent hedging specialists, we are seeing more and more interest from portfolio managers who want to evaluate the currency risk inherent in real estate investment decisions, and understand the potential impact of FX movements on potential returns.
Much of this increased attention on currency exposure is being driven by the underlying investors in real estate funds/vehicles, who are obviously keen to understand the inherent risk to their returns.
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