According to CBRE's "Investor Intention 2021" survey, London will be the most attractive location for investors in the EMEA region in 2021. IBesides, Berlin, Frankfurt, Paris and Amsterdam were in the top five preferred cities. However, the German cities of Munich and Hamburg were in the next two places. Respondents, therefore, expect that Germany will first recover from the corona crisis in the field of investment in Europe. At the same time, their assumptions are supported by the fact that the volume of German investments recorded a year-on-year decline of only 5% in 2020.
The findings recorded within the CEE region are also interesting. Every second investor in the survey indicated that in 2021 it plans to increase its transaction activity. Poland and the Czech Republic should see the fastest recovery in Central and Eastern Europe. However, it turns out that investors are more cautious. The most sought-after investments are basic stabilized assets with long-term leases.
Ľubor Procházka, Sales Director of CBRE Slovakia, commented on the situation on the Slovak market. “Slovakia, like the rest of Europe, followed in 2020 a downward trend in the volume of investment in commercial real estate. Also in Slovakia, investments in industrial and office real estate dominated, which are more resilient at the time of the pandemic.
Unlike Western Europe, where the residential sector is the second largest in terms of investment, Slovakia is only discovering this area of real estate so far. We think that investments in the residential sector will intensify in the coming years in Slovakia as well, as is already the case, for example, in neighboring Poland or the Czech Republic,” describes Ľubor Procházka.
The results of the CBRE survey predict positive news. As many as 60% of respondents across Europe said they plan to invest more in real estate this year than in 2020. Almost 75% of these respondents plan to invest 10% more than last year. However, there are significant differences between countries. For example, in the case of British investors, according to the survey, more than 80% of respondents plan to invest more capital.
Despite the fact that many people are currently working from home in connection with the coronavirus, office real estate remains the preferred sector among European investors. According to the survey, 35% of them prefer it. The quality of office real estate should therefore continue to grow in the future. The second most popular real estate sector is residential real estate, in which 24% of respondents plan to invest.
This was followed by the industrial and industrial real estate sector with a share of 22%. Even in view of these findings, it is not surprising that we will see the highest prices in these three real estate markets. Most investors, on the other hand, expect significant discounts on retail and hotel real estate. They have the same assumptions in the case of lower-quality office properties.
Given the uncertainty surrounding the pandemic and its impact on the economy and the real estate market, more than 50% of respondents said that in 2021 they would prefer the so-called core and core-plus strategies. They will be more careful in their decisions. It is precisely such investment properties that are characterized by stably generated income, low risk, and are generally preferred by more conservative investors.
Respondents also showed in the survey a stronger focus on the adoption of the so-called ESG strategies (environment, society and government), 2/3 of which have already adopted the ESG criteria in their investment practices in the past. According to the survey, this form of strategy is most widespread in the United Kingdom, as it has already been adopted by 89% of respondents.
"Global investors continue to focus on real estate, which will also benefit the European market. Certainity about Brexit has also changed the minds of some investors, restoring their confidence in the London market. We therefore expect a large amount of European capital to be channeled here in the next 12 months. Germany has also been shown to be extremely resilient to the pandemic. Therefore, it is no surprise to us that investors have shown confidence in the rapid recovery of this country," concludes Chris Brett, Director of EMEA Region Capital Markets at CBRE.
Source:// Systémy logistky