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European Real Estate Investor Intentions 2014
There were 387 respondents to the 2014 CBRE online survey of European investor intentions, drawn from across the property investment community. Comparisons with the 2013 survey results highlight significant shifts in investor sentiment and preferences, against the background of improving economic conditions and higher investment activity in European markets.
Investor confidence in Europe is up sharply this year, with over 70% of investors choosing Western Europe as the most attractive global region for investment purchases.
Thirty-six percent of investors will invest outside Europe this year, mainly in North America and Developed Asia.
Within Europe, the UK has regained its position as the most popular country for investment this year with a fall in the proportion favouring Germany, last year’s first choice.
The 2014 survey shows a striking increase in the proportion of investors viewing Spain as most attractive for purchases, putting it in third place.
London is again the most attractive city for investment, with Madrid in second place this year; Barcelona also makes the list of top ten choices.
Germany has three cities in the top ten (Berlin, Munich, Hamburg) together with Paris, Amsterdam, Dublin and Warsaw.
Investor preferences for offices as the most attractive sector increased significantly this year. Logistics was the second most popular sector. Fewer investors favoured shopping centres and retail warehouses compared with 2013.
Investors are moving up the risk curve. Two out of three respondents said the most attractive types of assets to purchase were outside the prime/core category. Almost half said their risk appetite for secondary was higher than in 2013.
The survey found wide-ranging exposure to ‘alternative’ sectors with 51% of respondents already invested in one or more alternative sectors; leisure property and student housing were the most popular.
Investors are committing more capital to European real estate. Over half (56%) expect their purchasing activity in 2014 to be more than 10% higher compared with 2013. Three-quarters will be net investors.
The biggest obstacles to making acquisitions in Europe facing investors are the availability of assets, asset pricing and competition from other investors.
The greatest threat to European property markets is the perception that property has become over-priced. Other significant threats identified were US tapering/rising interest rates and government economic measures/austerity policies.
Over 60% of investors said if the UK voted to leave the EU it would make the UK less attractive as a location for investment.
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Last Modified: Tuesday, March 25, 2014
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