| Turkey is seen as the best property investment bet for residential properties in 2009 - say Price Waterhouse Coopers and The Urban Land Institute
Moscow and Istanbul ranked first and second, respectively, as this year’s top real estate markets in Europe for both investment and development prospects, according to the highly regarded real estate forecast Emerging Trends in Real Estate Europe 2008 published by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP in February 2008.
Hamburg and Munich held the third and fourth spots as top investment markets, and the two cities switched places as the third and fourth top development markets. According to the report, the changeup in the top markets suggests a desire by industry professionals to branch out of “Old Europe” cities and “investigate new markets and diversify current holdings and developments.”
Emerging Trends, which covers 27 markets in countries throughout Europe, is based on surveys and interviews with nearly 500 of the industry’s leading authorities. 2008 sees the fifth annual report. The report states that “Without question, Europe is facing a bumpier ride this year than the last few years. The findings in Emerging Trends show how markets in Europe have become more globally connected and more vulnerable to economic shifts occurring in other parts of the world,” said Richard Rosan, president, ULI Worldwide. “However, the fact that many respondents remain confident about European markets points to the still-local nature of real estate. We are seeing a lot of guarded optimism.”
“Tighter credit conditions, higher energy prices, a reduction in euro-based exports and a cooler housing market will have an impact in the months ahead,” said William Kistler, president ULI EMEA/India. “But, we firmly believe that most markets will weather the downturn with a soft landing, due to relatively stable property fundamentals and reasonable economic growth. Those who are patient and prudent will succeed.”
In terms of markets ripe for investment, top-ranked Russia was rated first or second in terms of “buy” recommendations for all property types, with office and retail particularly strong. However, the Russian market was also ranked as one of the riskiest “This market has huge depth and breadth; nobody has begun to scratch the surface”. The report scored Turkey equally high as a strong “buy” market. One Emerging Trends respondent refers to Turkey as the India of Europe.” Turkey and Russia both feature in the recommended countries for investment in all types of property usage – each alternating between first and second place. Turkey is said to be the best buy for residential dwellings.
Specifics on property sectors include:
• Retail – Best Bets: Southern, central and eastern Europe are potentially strong markets, not least due to strong tenant demand as “retailers are piling into these markets. While some markets in central Europe are reaching saturation, the best opportunities are seen in the new European markets east of EU members.
• Mixed Use – Best Bets: Mixed-use schemes are topical in nearly all parts of Europe, with all capital cities offering these types as (investment and development) possibilities. Such projects have excellent prospects in central and eastern Europe, where master-planned communities will become more attractive.
• Hotels – Best bets: Moscow and Istanbul are considered first choices in the ranking of potential hotel investments, as they are undersupplied in nearly all hotel categories. Interest in tourist hotels in some central European cities is also emerging. In Germany, there is potential for hotel developments near infrastructure hubs such as airports and seaports.
• Industrial – Best Bets: A lack of supply is drawing investors to industrial and supersheds in eastern markets such as the Ukraine, Turkey and Russia. Distribution properties are hotly pursued investments in other parts of Europe, particularly Germany, Scandinavia, France and the Netherlands.
• Office – Best Bets: In most of Europe, city centre offices are regarded as the best bets of all property types. In eastern Europe, Istanbul and Moscow are mentioned favourably; in western Europe, Hamburg and Munich are rated highly, as are Paris and Lyon. Prime space in the Dutch office market holds potential.
• Residential – Best Bets: Infatuated with population growth and rising incomes, investors see Turkey as a market offering phenomenal prospects. Moscow is viewed as an underserved market, and Munich, Berlin, Hamburg and Frankfurt are also cited as markets in which demand exceeds supply. |
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