2017年-普华永道全球_Emerging_Trends_in_Real_Estate®_Europe_2018_86页_13mb

Summary of Emerging Trends in Real Estate® Europe 2018

Core Content

The Emerging Trends in Real Estate® Europe 2018 report outlines the state of the European real estate industry in the context of a low-return market and the long-term effects of technology, social change, and geopolitical uncertainty. It highlights the industry's cautious optimism, the shift towards quality assets, and the evolving business models that are reshaping the sector.

Main Trends and Views

1. Industry Outlook

• The European real estate industry is described as "cautious but positive", driven by a better macroeconomic outlook and stronger occupier demand.
• Germany is seen as a safe haven for capital, with Berlin ranked as the top city for investment and development prospects in 2018.
• Copenhagen and Frankfurt are also highlighted as leading cities due to strong employment growth and the impact of Brexit.
• Despite a late-cycle market, there is strong demand for quality real estate, with a flight to quality evident across the continent.

2. Economic and Investment Environment

• Low but rising interest rates are expected to continue, making real estate more attractive than bonds.
• Low yields and high financing costs remain a challenge, but the yield gap between real estate and bonds is still compelling.
• Brexit is a major concern, especially in the UK, with London still considered a global financial hub but facing rental softening and investment uncertainty.
• Geopolitical instability is a key concern, but continental Europe is more confident than the UK.

3. Investment Strategy and Risk

• Investors are taking more risks to achieve target returns, especially in secondary cities.
• The availability of suitable assets is a key issue, with a focus on core assets and value creation.
• Redevelopment is increasingly seen as the most attractive way to acquire prime assets, driven by urbanization and infrastructure investment.
• Smart asset management is critical in a low-yield environment, involving tenant management, refurbishment, and re-gearing.

4. Changing Occupier Demands

• The rise of co-working and flexible office spaces is a significant trend, driven by changes in how people work.
• Collaboration between tenants and landlords is becoming more important, with shorter leases and break options being requested.
• The shift from rigid to flexible space models is forcing the industry to reconsider obsolescence and operational models.

5. Impact of Brexit

• Brexit is seen as a long-term challenge for the UK, particularly in terms of investment and property values.
• Uncertainty around Brexit is affecting business confidence and decision-making.
• While London remains a key financial center, there is a shift in investment to cities like Frankfurt, Dublin, and Paris due to the relocation of businesses and jobs.
• International instability is a growing concern, with China and the Middle East seen as potential sources of future economic downturns.

6. Residential Market

• The residential sector is becoming more attractive due to housing shortages across Europe.
• Affordable housing is a key social issue, and the fundamental demand-supply imbalance is expected to drive rental growth.
• Build-to-rent is gaining traction, with institutional investors showing interest in this model.
• There is divergence in views, with some calling for government incentives and others struggling with management complexity.

Key Figures and Insights

• 42% of respondents expect business confidence to increase in 2018, up from 32% in the previous year.
• 36% of respondents target lower returns in 2018 due to low yields.
• Two-thirds of survey respondents believe redevelopment is the most attractive way to acquire prime assets.
• Half of the respondents expect European economic growth to improve over the next three to five years.
• 72% of survey respondents think Brexit will reduce the UK's ability to attract international talent in 2018.

Conclusion

The European real estate industry is adapting to a low-return environment, focusing on quality assets, value creation, and operational efficiency. While Brexit and global instability remain concerns, the sector is also embracing new business models, such as co-working and mixed-use development, to meet evolving occupier needs. The residential market is gaining traction as a viable investment opportunity due to housing shortages and strong demand-supply dynamics. Overall, the industry is moving towards more strategic and selective investment, with redevelopment and smart asset management becoming central to success in the new era of real estate.