Top 10 European Cities for Existing Property Investments
| 2016 ranking | 2015 ranking | Change |
|---|---|---|
| 1 Berlin | 1 | 0 |
| 2 Hamburg | 4 | 2 |
| 3 Dublin | 2 | -1 |
| 4 Madrid | 3 | -1 |
| 5 Copenhagen | 7 | 2 |
| 6 Birmingham | 6 | 0 |
| 7 Lisbon | 9 | 2 |
| 8 Milan | 12 | 4 |
| 9 Amsterdam | 8 | 1 |
| 10 Munich | 11 | 1 |
London has fallen out of the top 10 in a list of European cities with the best real estate investment prospects as concerns about value dominate.
The Urban Land Institute and PwC’s Emerging Trends in Real Estate report predicted that Berlin would remain the most attractive European city for investors this year, thanks to its creative, technology and cultural strengths.
Hamburg, Dublin, Madrid and Copenhagen completed the top five, with Birmingham – ranked sixth – the sole UK city in the top ten.
The absence of London in the list reflected the wider theme of the report, which found investors seeking value in alternative sectors and with more appetite for development as a means to acquire prime assets.
It said the rapidly changing demands of occupiers and the disruptive forces of technology, demographics, social change and rapid urbanisation were having a major impact on investment intentions.
These disruptive forces had led investors to focus on operational sectors that have benefited from rapid urbanisation and demographic shifts, such as healthcare, hotels, student accommodation and data centres. Some 41% of respondents were considering alternatives, up from 28% last year, said the report.
The same forces are set to make high street retail and logistics attractive sectors this year, the report said.
More than three-quarters of respondents said development would create value this year, and the report noted an increasing focus on the role of the physical workplace in talent management and productivity.
“Investors are getting more creative in trying to access future prime assets at reasonable prices through more focus on alternatives and development,” said ULI Europe chief executive Lisette van Doorn. “They take more risk on the short term to fulfil their long-term objective for core assets.”
The continuation of low interest rates and the weight of capital chasing European property meant most investors remained bullish about the industry’s prospects in 2016, PwC director Gareth Lewis added.
“But they acknowledge that the global field for real estate is increasingly competitive, and if the current wall of capital recedes, there will be an even stronger focus on underlying market fundamentals, active asset management and operational skills.”
jack.sidders@estatesgazette.com
