ULI Netherlands: Emerging Trends in Real Estate® 2016

What kind of assets are investors looking for and what are the top cities for investment in 2016? These questions and many more were answered at our annual Emerging Trends in Real Estate®  Europe event, co-hosted by PwC.

This year’s report found that in Europe, the top five cities that international investors are looking at are Berlin, Hamburg, Madrid, Dublin and Copenhagen. Investors’ focus is mainly on cities, especially on well densified areas within cities that are mixed in terms of use and income groups, liveable and well connected. In those areas housing is the most important asset, which is expected to be the case for some time because of the absence of good alternatives, the expected long term growth of the urban population, and the increase of single households. The focus on housing does not only count for rental housing, but also for student housing and retirement living. While retail and offices are still important, the differences between top locations and the periphery are big. Expert opinions differ on the importance of health care (housing) in the near future.

Development is also expected to create value in 2016, with 78 percent of respondents citing development as an attractive way to acquire prime assets. More progressive developers and investors are innovating in an attempt to meet the needs of increasingly informed and demanding occupiers. The property developers, investors and operators leading the pack are paying more attention to the role the physical workplace plays in talent management and workplace productivity.

“Investors are getting more creative in trying to access future prime assets at reasonable prices through more focus on alternatives and development,” said ULI Europe CEO Lisette van Doorn. “They take more risk on the short term to fulfil their long term objective for core assets. At the same time, more and more players in the real estate industry are starting to address the needs of occupiers, who are seeking harmony between their workplaces and their lifestyle needs. Some of the industry’s biggest challenges right now are how to become less about brick and mortar and more about service and the implications this may have for the traditional business models of real estate operators.”