15 Mar 2017
Yesterday at MIPIM, RICS and DLA Piper analysed the risks associated to political instability and the opportunities to invest in European real estate markets.
While the prospects for EU real estate markets remain very attractive for investors, concerns over political uncertainty ahead of Brexit and a number of crucial elections in the euro zone could affect investors' mood and new market trends across the continent.
Read our full summary of day two at MIPIM
Experts from Frankfurt, London, Dublin, Paris, Budapest and Warsaw joined RICS President Amanda Clack FRICS to highlight the rapid changes that the real estate industry is experiencing and the growing importance of politics in property.
Highlights from the panel session
According to the latest research and surveys, such as the RICS Commercial Property Monitor, trends in CEE markets are very positive but when we say that we should look at 'cities' and not countries. Investment and occupier demand is booming in cities like Budapest and Prague for various reasons: firms are willing to be located in dynamic cities such as Budapest and Prague where occupiers can get a good quality of life, with highly educated young people bringing innovative ideas in a non-expensive European market compared to other cities.
I anticipate investment demand in Warsaw coming from other European countries, especially on prime locations. The only risk will be If banks stop lending and occupiers demand stop.
Physical connectivity among other cities and communities is important to attract businesses and for firms to be close to the ECB and one of the major European financial centres is crucial too. Although national elections could bring certain uncertainty German cities are booming and post Brexit we can anticipate 8000 banks moving to Frankfurt to rent new offices, whilst in London we expect a major drop.
In France the uncertainty about the upcoming French elections is more noticiable among foreign investors while internal demand remains the same in Paris.
In London, after the first reactions to the June referendum on Brexit, the market stabilise quite quickly in the UK market but supply growth is expected to decline with impact on rental values in the City. However, great opportunities in regional cities with good connectivity and good educated human capital will bring grateful demand, from firms, this is the case for cities such as Glasgow, Manchester and Birmingham.
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