The Emerging Trends in Real Estate® Europe report was launched this month, as well as the US and Asian reports.  Undertaken in partnership with PwC, the reports provide an outlook on real estate investment and development, real estate finance and capital markets, as well as trends by property sector and geographic area.

Based on the opinions of 800 industry leaders, the European research highlighted the current period of uncertainly with some 89% of respondents ranking international political instability at the top of their list of concerns.

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.

When looking at the sectors, alternatives once again dominate the list deemed to have the best prospects for the year ahead, with only high street shops from the three ‘mainstream’ sectors making the top ten. 44 % of respondents say they would like to invest in these sectors, an increase of 16% over the previous two years.

Looking ahead, 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 real estate 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.

Events to debate the findings of the report were held in London and Birmingham, plus a special event for our Young Leaders members.  A further event is to be held in Scotland in January. Although opinions weren’t always harmonious, there was an agreement during our discussions that we find ourselves in a time of change and a time when brave decisions are needed.

Copies of the European, US and Asian Emerging Trends in Real Estate® reports can be downloaded from our website: http://uli.org/research/centers-initiatives/center-for-capital-markets/emerging-trends-in-real-estate/