Real estate investments in Europe - Statistics & Facts

In 2019, three 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 the events leading to Brexit. Second, there is a wider trend to move away from traditional hubs, such as London, Paris 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. According to a report conducted by BNP Paribas, office real estate prime yields in Warsaw (Poland) reached 5.15 percent as of the second quarter of 2018 as larger cities in Europe tended to produce yields under four percent.

Property investments in Europe traditionally focused on the office real estate market and the market for houses, or residential real estate. The most expensive monthly rentals in 2018 could be found in Paris, London and Luxembourg City respectively, with eight European cities having an average monthly rental price of over 2,000 U.S. dollars. For this reason, 21 percent of all sold houses in Amsterdam in 2017 were immediately offered on the rental market by the landlord. Office investments in Dublin more than doubled between 2017 and 2018 with the cheapest rental prices for prime office properties, as of the second quarter of 2018, to be found in Bucharest, Romania, with a rent of approximately 222 euros per square meter per year, which is less than one sixth of the cost of office rent in London's West End. However, social and technological developments have disrupted this picture. Urbanization, demographics and changing consumer habits, due to the rise of e-commerce, have paved the way for new investments prospects, such as logistic facilities, assisted living facilities, data centers, shared offices and student housing. Especially warehouses currently attract much interest from investors. According to data from 2019, the United Kingdom was ranked as the largest target for industrial and logistics real estate investments in Europe. This country was followed by Germany, the Netherlands and France.

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