The spectre of Brexit undoubtedly weighs heavily on the minds of many in the European real estate industry, as a source of gloom and, for some, opportunity.
While there is a general post-Brexit slump in sentiment towards the UK, investors continue to see value in real estate across many parts of the rest of Europe. However, return expectations are being scaled down, and the importance of active asset management as a means to access income is being talked up.
In this risk-off climate, in which many real estate investors are clearly willing to sacrifice some yield for lower risk, Germany is widely regarded as the new haven for capital. According to Emerging Trends Europe, the five leading cities for overall investment and development prospects in 2017 are Berlin at Number 1, followed by Hamburg, Frankfurt, Dublin and Munich.
What is abundantly clear after taking the pulse of the industry, is that below the surface, there are complex and significant influences at play beyond today’s geopolitical issues. Looking ahead to 2030 there are changes that are altering society and our industry’s view of the future role of the built environment and the property cycle – as it affects supply, occupation, ownership and investment.
The European industry is experiencing a seismic shift in its centre of gravity – from real estate as a financial asset, to a product and more significantly, to real estate as a service.
Emerging Trends Europe 2017 raises more questions than answers. Is the industry prepared to innovate? Will it be today’s real estate leaders, or new and different players, that will meet these challenges? Are we entering a period of fundamental and structural change in the real estate industry as a whole or simply a period of redefining what good real estate is?
Our report reveals an industry that is starting to look beyond traditional boundaries, perhaps realising it does not have all the answers. But if it is to thrive in a fast-changing and uncertain world, it will need to make bold decisions.