It’s been a positive year for Europe’s real estate markets amid strong investment volumes across countries and sectors – and there’s more on the cards for 2019.
Despite the uncertainty created by its departure from the European Union, the UK continues to attract investors who remain confident in the country’s real estate, while France and Germany’s fine 2018 performance in particular is set to continue into 2019.
“The UK had its second highest nine-month investment volume on record and, more broadly, we expect investment in EMEA’s main markets to endure,” says Matt Richards, JLL Head of EMEA Capital Markets.
Yet there are noticeable shifts. The way investors evaluate European real estate is shifting, broadening the market both in terms of risk profile and sectors targeted.
Global capital is spreading into the region’s traditionally less-visited markets and sectors. Be it student housing in Italy, or the private residential sector in Ireland, investors are pushing out further in the search for reliable income.
Across Europe, healthcare investment, for example, has grown 24 percent a year since 2013 and could top €20 billion by 2022. Healthcare, says Richards, has enough liquidity to make it a “professionalized sector in its own right”, with traditional real estate funds, infrastructure funds and specialized investment houses creating deep pools of capital.
“What’s also changing is the risk appetite among investors – opportunistic and value add strategies are being put into action in smaller EMEA markets,” he says.
For investors, the ability to adapt, says Richards, is becoming essential, as the way real estate is leased and managed challenges decision makers.