Investment in real estate in Europe

Investment in real estate in Europe

Europe is one of the most attractive regions in the world for real estate investment. Thus, the commercial real estate sector in 2020 was estimated at about 9 trillion US dollars. The largest investments in commercial real estate have been made in the UK, Germany and Sweden. For most investors, the transport accessibility of a city is the most important factor when choosing a city for real estate investment.

Investments in real estate in Europe tend to go into office real estate and housing. At the same time, now and in the future, investments in new energy infrastructure facilities, data processing centers, logistics facilities, and the life sciences sector are becoming popular. The value of investment in industrial and logistics real estate in Europe has more than tripled since 2012. The popularity of shopping centers among investors is declining.

In residential real estate, the emphasis is shifting to housing for the elderly and students.

The most popular and investment-attractive cities are Germany (Berlin, Hamburg, Munich and Frankfurt), central London and central Paris.

Despite the coronavirus, the planned level of return on investment in real estate in Europe in 2021, according to surveys of industry experts, will be at the level of five to ten percent. Investing in European housing, offices or warehouses is a good alternative to investing in stock markets, which are affected by complex geopolitical events.

With population growth in Europe, the need for affordable housing continues. Across Europe, countries are building hundreds of thousands of residential properties every year to meet growing demand. In this regard, Poland is one of the European leaders. The largest number of completed houses (according to 2018 data) was in France. Germany and Poland follow.

In Europe, the average transaction price per square meter of new housing varies from country to country. Thus, in the UK it is more than three times higher than in Poland and Hungary. The average price of new residential real estate in 2020 was the highest in Austria - approximately 4,500 euros per square meter. Bulgaria had the lowest average transaction price of 578 euros per square meter over the same time period.

Some of the most expensive cities in Europe in terms of rent for residential premises are Paris, London and Amsterdam. Here, the average monthly rent for a furnished two-room apartment exceeds 1,500 euros. London and Paris are also the cities with the highest office rental prices in 2021.