The real estate market in Europe - Statistics & Facts

1) In 2017, four German cities were ranked the highest with regards to the existing investments in their real estate market performance and quality. London, long seen as a relatively safe place for investments in real estate, did not make it to the top ten. There are two reasons why investors seem to leave London. First, the United Kingdom faces the risk of lower economic growth and losing EU-focused (financial) businesses to continental Europe due to upcoming Brexit negotiations. Second, there is a wider trend to move away from traditional hubs, such as London, Paris, Frankfurt or Milan. While these cities will remain attractive to real estate investors, the stability and opportunities provided by other cities such as Dublin, Lyon, Hamburg or Lisbon makes them even more attractive in a market with a mainly risk-off approach. Indeed, already in June 2015 Asian and American investors showed an interest in investing in countries other than the Tier-1 countries of Germany, the United Kingdom or France.

2) Real estate investments in Europe usually focus on the office real estate market and the housing, or residential real estate, market. Office real estate transaction volumes reached an amount of approximately 20.6 billion euros in the first quarter of 2016. The cheapest rental prices for prime office properties, as of the end of 2016, were found in Bucharest, Romania, with a rent of approximately 216 euros per square meter per year, which is less than one sixth of the cost of office rent in London's West End. Between the start of 2014 and the end of 2015, Germany, Estonia, Ireland, Luxembourg and Portugal were among the countries which experienced an increase in housing prices, whilst the prices in Slovenia and Italy decreased. However, both office and residential real estate in Europe could be threatened by social and technological disruptors. Urbanization, demographics and changing consumer habits, due to the rise of e-commerce, have paved the way for investments in alternative real estate. Examples of this new type of real estate include investments in hotels, student housing, assisted living facilities, data centers, healthcare and shared offices.

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