News »
27. Januar 2012 
Print
Print
Little relief for European real estate investment and development in 2012
This year, the report predicts, investors will continue to eschew a strategic focus on whole countries, cities or sectors in favour of asset-led, deal-by-deal approaches. “Nowhere is considered a ‘must buy,’ today,” it says.
Values posted for European cities “could hardly be described as electric,” it notes, with over half the cities recording a lower investment score than last year, including major markets such as London, Frankfurt, Copenhagen, Madrid and Rome. The top-ranked cities in the survey tend to be either in western or northern Europe, or growing regions to the east. The top five markets are:
• Istanbul – For the second consecutive year, Istanbul is ranked first for both investment and development. Its popularity is due largely to its strong economic growth prospects and demographics (a young, growing population). Retail development in Turkey has particularly high potential, with consumer spending on the rise and an influx of major international companies. “Turkey’s appeal is based on a long-term view of the future,” says Emerging Trends.
• Munich – Munich ranked second in the survey. With one of the lowest unemployment rates in Germany, Munich’s economy is perceived to have fared well in the recent economic malaise. Its appeal is based on the notion of the city as a safe haven offering a deep and liquid market that is more stable than Frankfurt.
• Warsaw – Ranked third in the survey, Warsaw is viewed more favourably by outside investors than domestic ones. Investors anticipate the city’s increasing prominence as the financial centre for the Eastern European region, boosting the city’s office sector. Its retail sector is also
highly favoured, as the city has attracted international retailers. Extremely low retail vacancy rates and limited supply will keep this sector strong.
• Berlin - Berlin, ranked fourth, was Europe’s most attractive market for residential investment. Its appeal, like that of Munich, is stability, and its popularity with interviewees reflects a wider search for safety in today’s market environment.
• Stockholm – Stockholm, ranked fifth, was another favourite for investors picking safe cities. The city and Sweden overall have impressed investors with a strong performance throughout the financial downturn. It is considered one of the strongest markets in Europe, due to strong public sector finances and a solid export-driven economy.
In addition to Istanbul holding firm as the top investment and development market, the report highlights other trends:
• The rise of Moscow as an investment magnet. Of the Russian-based interviewees, 82 per cent anticipate deployment of more capital into real estate this year, and 75 per cent expect profits to rise.
• The decline of London in the ratings for new investment, existing investment and development. Respondents cited concerns over the difficulty of obtaining assets, strong competition and pricing on the brink of a bubble.
• The likelihood that investment will increase in few of the 27 markets in the survey. Respondents predicted greater investment in a quarter of the cities – Berlin, Hamburg, Istanbul, London, Moscow, Munich and Stockholm – but said capital values and rents would likely hold steady rather than rise as a result of the investment activity.
Respondents from Ireland (“Irish interviewees believe their economy is through the worst”) and Turkey were the most optimistic about business confidence and profitability over the coming months. Least optimistic were respondents from the Czech Republic, France and Portugal.
Values posted for European cities “could hardly be described as electric,” it notes, with over half the cities recording a lower investment score than last year, including major markets such as London, Frankfurt, Copenhagen, Madrid and Rome. The top-ranked cities in the survey tend to be either in western or northern Europe, or growing regions to the east. The top five markets are:
• Istanbul – For the second consecutive year, Istanbul is ranked first for both investment and development. Its popularity is due largely to its strong economic growth prospects and demographics (a young, growing population). Retail development in Turkey has particularly high potential, with consumer spending on the rise and an influx of major international companies. “Turkey’s appeal is based on a long-term view of the future,” says Emerging Trends.
• Munich – Munich ranked second in the survey. With one of the lowest unemployment rates in Germany, Munich’s economy is perceived to have fared well in the recent economic malaise. Its appeal is based on the notion of the city as a safe haven offering a deep and liquid market that is more stable than Frankfurt.
• Warsaw – Ranked third in the survey, Warsaw is viewed more favourably by outside investors than domestic ones. Investors anticipate the city’s increasing prominence as the financial centre for the Eastern European region, boosting the city’s office sector. Its retail sector is also
highly favoured, as the city has attracted international retailers. Extremely low retail vacancy rates and limited supply will keep this sector strong.
• Berlin - Berlin, ranked fourth, was Europe’s most attractive market for residential investment. Its appeal, like that of Munich, is stability, and its popularity with interviewees reflects a wider search for safety in today’s market environment.
• Stockholm – Stockholm, ranked fifth, was another favourite for investors picking safe cities. The city and Sweden overall have impressed investors with a strong performance throughout the financial downturn. It is considered one of the strongest markets in Europe, due to strong public sector finances and a solid export-driven economy.
In addition to Istanbul holding firm as the top investment and development market, the report highlights other trends:
• The rise of Moscow as an investment magnet. Of the Russian-based interviewees, 82 per cent anticipate deployment of more capital into real estate this year, and 75 per cent expect profits to rise.
• The decline of London in the ratings for new investment, existing investment and development. Respondents cited concerns over the difficulty of obtaining assets, strong competition and pricing on the brink of a bubble.
• The likelihood that investment will increase in few of the 27 markets in the survey. Respondents predicted greater investment in a quarter of the cities – Berlin, Hamburg, Istanbul, London, Moscow, Munich and Stockholm – but said capital values and rents would likely hold steady rather than rise as a result of the investment activity.
Respondents from Ireland (“Irish interviewees believe their economy is through the worst”) and Turkey were the most optimistic about business confidence and profitability over the coming months. Least optimistic were respondents from the Czech Republic, France and Portugal.
Previous Page
