In 2018 Berlin is Europe’s most attractive property location, followed by Copenhagen, Frankfurt, Munich, Madrid and Hamburg. At least this is what the 800 European property experts interviewed by the Urban Land Institute and PwC about their investment preferences say.
London is missing in the top ten, the British Isles are represented by Dublin (7th). Property experts think that the business prospects for the British capital are currently extremely poor – London comes 27th and, thus, on a par with B locations like Edinburgh and Rome. 80 per cent of the respondents expect prices and transactions to go down in 2018. British market players show frustration with the little progress made in the Brexit negotiations. This makes it difficult for everyone in the economy to make decisions. The surveys showed that such scenarios benefit a recession.
There are Few Surprises in the Cities, as Opposed to the Sectors
The most promising sectors for 2018 were also a topic of the survey. Logistics comes first. Then it gets interesting: Former niches, like hotels, student housing, retirement homes, building development and the development of social housing, largely received better points from the professionals than the former “classics” specialty stores and shopping malls as well as offices. Office concepts based on services (e.g. Regus) and the common use of spaces (coworking) were the only exception.
The green field shopping malls are affected more than any other sector. The respondents put them in last place, even behind industrial parks and offices in the periphery of big cities. But the city shopping malls are not really doing well either. The 1a locations in the city centers get the highest approval values – they achieve approval ratings in the vicinity of parking garages and social housing estates. It is not as if all real estate experts were only happy with the first in class logistics. The high purchasing prices and the uncertainties with respect to sizes and locations in sustainable demand are cause for scepticism. Smaller distribution centers near cities are currently in top position.
Optimism Still Prevails
Looking at the coming year optimism is still prevailing in the European property industry. With the exception of London user demand is expected to go up everywhere. There are growing reservations with respect to developments in the rest of the world, i.e. in the Middle East, the US under Trump and North Korea. 56 per cent of the respondents also said that the shortage of affordable housing was worrying them.
This makes the topic look more explosive in the industry than mass migration and climate change. It makes the European rented housing sector particularly attractive, the fear of institutional investors of the special requirements to building management in this sector is decreasing.
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Video with top expert statements right at the trade fair
The first EXPO REAL barometer of opinion – a representative survey among trade fair participants