This year, Emerging Trends Europe predicts, investors will continue to eschew a strategic focus on whole countries, cities, or sectors in favor of asset-led, deal-by-deal approaches. “[N]owhere can be considered a ‘must buy’ today,” the report says.
Following are the top five European markets, as ranked by survey respondents for Emerging Trends Europe:
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 Europe.
Munich. With one of the lowest unemployment rates in Germany, Munich has an economy 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 that in Frankfurt.
Warsaw. The Polish capital is viewed more favorably by outside investors than domestic ones. Investors anticipate the city’s increasing prominence as the financial center for eastern Europe, boosting the city’s office sector. Its retail sector is also highly rated, as the city has attracted international retailers. Extremely low retail vacancy rates and limited supply will keep this sector strong.
Berlin. Europe’s most attractive market for residential investment, Berlin, like Munich, has appeal based on stability, and its popularity with interviewees reflects a wider search for safety in today’s market environment.
Stockholm. A favorite for investors picking safe cities, Stockholm, like Sweden overall, has impressed investors with a strong performance throughout the financial downturn. It is considered one of the strongest markets in Europe because of its strong public sector finances and a solid, export-driven economy.
ULI-the Urban Land Institute