New market realities in Real Estate for Europe

New market realities in Real Estate for Europe

While there is a general post-Brexit slump in sentiment towards the UK, investors continue to see value in real estate across many parts of the rest of Europe. However, return expectations are being scaled down, and the importance of active asset management as a means to access income is being talked up.

What is abundantly clear after taking the pulse of the industry, is that below the surface, there are complex and significant influences at play beyond today’s geopolitical issues. Looking ahead to 2030 there are changes that are altering society and our industry’s view of the future role of the built environment and the property cycle – as it affects supply, occupation, ownership and investment.

The European industry is experiencing a seismic shift in its centre of gravity – from real estate as a financial asset, to a product and more significantly, to real estate as a service.

Real estate is approaching a tipping point where the alternative becomes the norm. While they are still seen as difficult to access, alternatives are growing in popularity and are seen as offering the best returns.

In a changing real estate world, traditional offices and shopping centres are now classed among the riskiest assets, left behind by urbanisation and changing consumer habits.

Much of the office demand is focused on the central business district: “Office availability in prime areas is very low. All the companies are trying to put their people within reach of restaurants and shops, communications and transport.”

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