London ‘most attractive city’ for European investors

London has retained the title of being Europe’s most attractive city for real estate investment, according to a CBRE survey. The capital pipped Paris and Amsterdam to the top spot in a poll of investors, 60% of which expect to deploy more capital this year than in 2021. Berlin and Frankfurt rounded out the top five cities, reflecting a growing focus on the German market. Germany was also ranked highest in terms of expected performance, with just over a quarter of cross-border investors expecting the country to perform best in 2022. This follows a record-breaking performance in 2021, when investment volumes in Germany increased 39%. The UK was ranked second overall, up from fifth place in 2021, with just under 25% of investors expecting the country to perform the best in the year ahead. CBRE said the nearly two-thirds of investors expecting to buy more real estate in 2022 than 2021 was particularly notable, given the fact that investment volumes closed at an all-time high last year. Chris Brett, managing director of EMEA capital markets at CBRE, said the desire to spend was “stronger than ever”.  “This will be supported by the likely continued easing of Covid-19 restrictions throughout 2022 and the return of overseas investment, which will further boost capital flow. The improved sentiment for offices points to the ongoing recovery of the sector, and we expect investment volumes to increase in step with this recovery,” Brett said. While the research reflected a growing focus on ESG strategies, only 70% of investors indicated that they had actually implemented ESG criteria in their investment practices – up from 66% last year.  Four in five investors said improving physical assets would be their primary method of meeting sustainability goals. Investors also said they are increasingly turning to value-add opportunities in search of higher yields. In the UK, 45% of respondents said value-add investments were their favoured strategy, while only 12% opted for core. In Germany and France, investors were more conservative, with 35% and 30% choosing value-add and 19% and 20% opting for core respectively. Brett added that this trend reflected a “willingness to move up on the risk curve in response to competitive pricing and the weight of investment capital exceeding the availability of stock”. To send feedback, e-mail alex.daniel@eg.co.uk or tweet @alexmdaniel or @EGPropertyNews Image © Vuk Valcic/SOPA Images/Shutterstock