Around 67% of investors in the EMEA region are looking for quality office assets in key markets as strategic choices and European cities like London, Paris, Berlin and Munich have retained their appeal, Colliers says in the “2022 Global Outlook” report .
ESG considerations are paramount, with nearly three out of four investors integrating environmental factors into their strategies. This willingness to invest intentionally is both a means of securing their assets and responding to pressures from stakeholders and society forcing them to respond to the climate crisis.
We are seeing increased investor pressure on ESG issues, which in the core and core-plus segments have become one of the main selection criteria over the past six months. The lack of appropriate ESG benchmarks already affects not only the valuation of real estate, but also the liquidity of real estate in the investment market – some funds are not allowed to acquire real estate that does not respond to specific ESG requirements. We expect this trend to strengthen over the next twelve months.
Piotr Mirowski, Senior Partner, Head of Investment Services.
The three main assets of choice are industrial and logistics, which unsurprisingly remains the first asset of choice, with 69% of respondents most likely to invest in this asset in 2022, followed by 57% in offices and 40% in apartment buildings. Europe’s hotel industry is back on investor radar thanks to an emerging revival in travel and tourism. But labor shortages have made it difficult for some hotels to return. The conversion of hotels remains a trend that attracts value-added players. Investors expect price increases in luxury retail, commodities and food-related assets. Traditional shopping centers are likely to experience a period of transition, with repositioning of department stores a potential prelude to short and medium term trends. The alternative segments that are gaining the most attention in Europe are life sciences, student housing, affordable housing and data centers. The life sciences market in Europe is lagging behind the United States and the data center market is less mature than in Asia, which can make it difficult to secure income-producing assets at scale. . The office locations of choice are London (45 pct); Paris (30 pct); Berlin (30 pct) and Munich (30 pct). Investors see office space as a potential area where they can see returns relative to the market. The survey shows that multi-family / BTR assets are gaining in appeal, especially among investors in Nordic countries and Southern Europe. There is considerable interest in traditional owner markets such as Poland as social and economic trends indicate more people are renting.