Germany is Top Target for Real Estate Investors in 2013
Germany is Top Target for Real Estate Investors in 2013
March 13, 2013
Evidence of Significantly Improved Sentiment as Fears of Euro Break-up Subside
Please note that the original version of this release was announced in France on March 13.
Cannes, 13 March 2012 – Germany is the number one target for European property investors in 2013, while London stands out as the single most attractive city for the second consecutive year, according to the latest research by global property advisor CBRE.
CBRE’s latest ‘Real Estate Investor Intentions’ Survey*- launched today at MIPIM 2013, the property industry’s annual trade show held in Cannes, France - found that Germany is the most attractive market for investment in Europe for more than a third of investors (35%) – an increase in popularity when compared with 27% in the 2012 survey. The United Kingdom (UK) is the second most attractive market, selected by 24% of investors.
Central and Eastern European (CEE) markets were chosen by 14% of investors compared with 19% last year. The majority of investors choosing the CEE region considered Poland to be the most attractive market for purchases, with limited interest in markets elsewhere in the region. Poland’s selection by 10% of respondents exceeded the votes given to France, Spain and the Nordics, which were each chosen by 5%-6% of investors. Spain’s tally of 6% was an improvement on its share last year, but Italy slipped to 2%.
As in the 2012 survey, London was named as the top target city for investors in Europe, with 31% of the vote. Underlining this, London recorded its highest volume of transactions last year since 2007, with purchases dominated by cross-border investors. Its attraction owes much to the size and liquidity of its investment market, with its perceived ‘safe haven’ status recently adding to its pull on international capital flows.
Germany does not have a single dominant city on a par with London or Paris, but four German cities appear in the top ten choices for investment and their overall popularity increased significantly compared with last year. Munich appears in second place (16%) followed by Berlin. Hamburg and Frankfurt also featured in the top ten, with the four German cities together collecting 34% of the vote compared with 21% last year.
Paris closely followed Berlin in the city ranking, while Warsaw’s position in fifth place reflects the strength of investor interest in opportunities in the Polish market, underpinned by relatively favorable economic performance. Dublin’s appearance in the top ten is noteworthy and reflects investor perceptions of value and potential for recovery in this market, supported by evidence that Ireland is on the way to surmounting its economic difficulties. Madrid‘s inclusion in the top ten also suggests increased confidence in the recovery potential of the Spanish real estate market.
Peter Damesick, Chairman, EMEA Research, CBRE, commented:
“Investor intentions for 2013 continue to be shaped strongly by perceptions of market risk and the relative strength of economic fundamentals in different parts of Europe. The most favored markets for purchases remain heavily concentrated in northern Europe, notably Germany, the UK and Poland. Investors are still wary of southern European markets, although there are some signs that Spain is beginning to attract renewed interest. Confidence that Ireland’s economy is healing has encouraged interest in Dublin, which could be a positive harbinger for other troubled European markets once they display clearer signs of recovery potential.”
In the 2012 survey, the three most commonly cited threats to a recovery of the European property market were the inability of investors to source new debt, economic recession and a break-up of the eurozone. This year, as recession has become a reality in much of Europe, it is seen as the biggest threat to market recovery by almost half (47%) of investors. A eurozone break-up was selected as the biggest threat by only 9% of respondents this year, down from 24% in 2012. Concern over debt availability as a threat to recovery was cited by half as many respondents (14%) as last year.
Peter Damesick added:
“While recession is a key concern, fears of a euro break-up have subsided and the overall impact of the eurozone crisis on investment activity appears to have lessened. Despite a difficult economic backdrop, there is evidence of improved sentiment among European real estate investors compared to the mood a year ago. It remains to be seen if this might be dented by new uncertainties following the Italian election result but the survey findings fit it with several emerging trends in the market over recent months. These include signs of increased liquidity overall and more transactions in non-prime property and in certain peripheral European markets. These trends are set to continue and potentially gather pace during 2013.”
The 2013 survey also revealed some shifts in investor preferences between different sectors of the real estate market. As in 2012, offices were the single most preferred sector for purchases, chosen by 29% of investors. There is a marked rise in the popularity of logistics property among investors this year with 20% selecting the sector as the most attractive for purchases compared with 14% in 2012. In contrast, investors appeared more cautious towards retail property this year, with lower proportions of investors selecting shopping centers or retail warehouses as the most attractive sectors compared with the 2012 survey.
Notes to editors
* The CBRE 2013 survey of Real Estate Investor Intentions was carried out in February and was completed by more than 360 respondents from across the property investment community. The survey is designed to provide high level insights into investor views and sentiment towards global real estate markets, with a focus on Europe. It charts investors’ preferences in respect to regions, countries, cities, sectors and types of property assets. The survey also covers the influence of debt availability and the impact of the eurozone crisis on investment activity, and records investors’ views on potential threats to the property market recovery.
For detailed data, please review the attached files.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.