At least this is the outcome of the survey “Global Investors Intentions 2017” carried out among 2m000international investors by CBRE.
According to the study, London heads the list of the most attractive cities for real esate investment, chosen by 17% of the investors, followed by Berlin (15,8%) and Madrid (8,4%). Completing the five top places are Amsterdam and Paris, which has retained its fifth position in spite of aggressive asset prices and pre-election political risk. New to 2017 it should be highlighted that cities like Hamburg and Milan do not appear in the top ten, owing to a growing worry on the part of investors concerning asset prices in the more consolidated European markets, after three years of price rises.
“Madrid is a very attractive city for international investors for several reasons. Prices are still below those of other markets and in recent years there have been renovation projects and other interesting developments. Thus, rental increases are predicted. In 2016, this resulted in capital investment of more than 4,000 million euros in this city” stated Paloma Relinque, national director of Capital Markets at CBRE España.
Spain, sixth country most preferred by investors
With regard to the most attractive countries, Spain occupies sixth position, keeping its place in the top ten of all European countries, the Middle East and Africa. Germany is the market chosen for investment in 2017 by 22% of those surveyed, followed by the United Kingdom (20%), Eastern Europe (10%), Scandinavia (10%) and Holland (9%).
When asked about which sectors they envisage investing in, the most mentioned sector was that of offices, by 34.7% of investors. The industrial-logistics sector followed, chosen by 25.9%. However, one of the most notable conclusions is the growing appetite for alternative assets, in which 7 out of 10 real estate investors already invest. In detail, the real estate debt most interests 31%, followed by entertainment and leisure (27%) – which has grown the most compared to the previous year – and student (25%).
On the other hand, the report also shows the main concerns of investors in 2017. Of these, of most concern was the risk produced by an increase in all kinds of interest faster than expected, mentioned by a quarter of investors surveyed. It is also of note that, in spite of all the coming elections in Europe, with possible implications for the sector, investors attribute more importance to the economic climate than to geopolitical matters. The third worry is the warming up of process and the risk of a possible bubble.
For the second year running, additionally, the motivation for investment was analysed. In 2017, the main reason is that the profit expected at the time of investing in real estate is greater than other kinds of assets such as sovereign spreads. The stability of the market in the region, and the high liquidity are also two of the main investment boosters in 2017.