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.
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.