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Berlin is expected to be the top European real estate investment market in 2015, followed by Dublin, Madrid, Hamburg and Athens. Recovering markets like Dublin, Madrid and Athens which were hit by the economic downturn are regarded as being fertile grounds for property investors, according to the latest annual emerging trends report from the Urban Land Institute and PwC. The report points out that competition for prime assets in Europe’s major real estate markets is leading property investors to continue their move into secondary assets and recovering markets. It highlights a surge in popularity for real estate investment opportunities in a number of cities that were hit particularly hard during the last market downturn, with dramatic rises in this year’s city rankings for Madrid, up 16 position, Athens up 23 positions, Birmingham up 14 positions, Amsterdam up 17 positions and Lisbon up 17 positions. Berlin has moved up the rankings from last year, knocking Munich off the top spot for investment prospects in 2015. Historically dominated by domestic buyers, Berlin’s investment climate has now changed as international investors pour capital into the city, the report says. The city is described as a hotspot for media and technology and its young population has helped boost the investment appeal of its residential sector. Ranked again in second place, Dublin has had another strong year in which investors have jostled for opportunities. There was strong rental growth based on low supply, employment growth and an improving economy. Office rents and values are recovering strongly but still have some way to go before they reach their pre-crisis peak. Madrid has shot up the rankings for investment prospects and many overseas investors are targeting the city. But whether Spain offers solid, long term business prospects is hotly debated among opportunistic investors, the report points out. Hamburg has slipped by one place this year, but this is mainly due to investors looking to smaller, less established markets rather than any real decline in the city’s fundamentals, the report explains. International investors are flooding into Hamburg, accounting for half of the €2.4 billion of deals in the first three quarters of 2014. Its growing population means the residential sector is thriving. Athens is the biggest mover on the list this year, up 23 places to number five. In recent Emerging Trends surveys, investors have indicated a willingness to enter other distressed markets such as Spain, Ireland and Italy, but Greece is starting to gain attention, the report says. Although Europe’s hardest hit economy remains fragile, a few trail blazing investors are moving in to take advantage of pre-rebound opportunities. The report finds that in spite of economic uncertainties in Europe, property remains fertile ground for investors. Some 70% of investors expect more equity and debt will flow into their markets this year in a quest for the best real estate. The biggest problem investors are anticipating is a shortage of assets, ahead… Continue reading →
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