Last month's Brexit vote exposed cracks in the U.K. property market as a clutch of real-estate funds scrambled to freeze redemptions.
Now one investor is sensing pockets of opportunity as valuations cool.
"Generally speaking, the overall real estate market is fairly, if not to say overvalued, especially in prime London and there could be some further correction in that market," Pictet Alternative Advisors' CEO Nicolas Campiche told CNBC.
Pictet Alternative Advisors, an independent unit of Swiss private bank and asset manager Pictet Group, manages over $18 billion, according to its website. Pictet Group had 437 billion ($442.30 billion) under management or custody at the end of last year.
Campiche noted that Pictet Alternative Advisors had been "very prudent" on its property investments over the past 18 months, particularly in the U.K.
"We're in pretty good shape on that allocation," he said, noting concerns about the real estate market.
Market turmoil in wake of the U.K.'s May referendum vote to exit the European Union caused several British property funds to freeze their accounts as investors attempted to beat a fast retreat.
Campiche said that exposed a "misconstruction of product," noting "you can't create liquid product with illiquid assets."
But with signs those funds were gradually returning to normal, albeit at lower valuations - Aberdeen reopened its U.K. property fund last week - "it will eventually create a lot of opportunities to buy assets at the cheaper valuation," Campiche said.
Those U.K. property funds have already started to unload assets. This month, British Land sold the Debenhams building on Oxford Street for 400 million pounds ($523.67 billion) and other real estate funds, potentially including Aberdeen Asset Management, Henderson and Standard Life, were also planning to sell London assets, according to media reports.
But so far, Pictet Alternative Advisors had been seeking less risky strategies for the property market.
"We invest with a general partner that makes no use of leverage whatsoever in the purchase of mostly stressed or distressed assets, which they are looking to reposition as core assets," Campiche said.
"The fact that they are not applying any leverage means they have a far better staying power with those assets, which will enable them to weather the current volatility in the market."
With property prices in most large cities expensive, some with historically low capitalization rates, Pictet Alternative has been applying that "value add" strategy of buying properties in need of "transformation" in secondary cities outside of the U.K. as well, Campiche said.
Target regions have included the U.K., the U.S., the Netherlands and Germany, he said, adding that the funds haven't yet found good opportunities in Southern Europe.
Outside of physical properties, there were other opportunities to invest in the segment, he noted.
Within Europe, the rollout of the Basel 3 regulations for banks has impacted their ability to lend, Campiche noted. This presented an opportunity to provide financing to the sector, he said.
"For those that can serve as bank replacements, it's a very attractive spot to be because you can basically dictate very attractive terms for lending monies, especially in the real estate space," he said, noting that returns for mezzanine lending can be as high as 8-10 percent in euro terms.
That compared with many European sovereign bond yields falling into negative territory. The was yielding 0.011 percent on Wednesday's price.
Other managers appeared to have also turned cautious on the sector.
Interest in European property stocks has taken a hit in the wake of Brexit. In the Bank of America Merrill Lynch fund manager survey for July, a net of more than 15 percent of fund managers said they were underweight the sector, a sharp reversal from a net of more than 5 percent overweight in June. Around 10 percent of fund managers said that the sector was overvalued in the July survey.
European fund managers' allocations to U.K. stocks in general dropped, with a net 27 percent underweight the segment, up from a net 23 percent underweight in June, making it the most underweighted region globally, the survey found.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter