01 November 207
Reporter: Theo Andrew

Berlin tops investment and development outlook for 2018

Berlin has topped the table of the best European cities for real estate investment and development in 2018, according to a forecast published by Urban Land Institute and PwC.

This is the fourth year in a row the German capital has been top of the ‘Emerging City’ rankings, with its success attributed to its business expansion with its technology sector at the forefront.

Elsewhere, Copenhagen and Madrid pulled a seat at the top table for the first time, ranking second and fifth, respectively.

The two cities broke the stranglehold of the German cities on last years rankings, in particular Copenhagen, which leap-frogged Munich (fourth) and Hamburg (sixth), to tie with Frankfurt in second place.

The survey of over 800 European real estate professionals suggested that Copenhagen has been driven by a strong residential investment, while Madrid’s office rental surge has been helped by Spain’s 3 percent growth in gross domestic product.

Also, speaking on the impact of technology, Lisette van Doorn, chief executive of ULI Europe, said: “Our conversations with industry leaders have demonstrated that technology is increasingly being viewed as one of the key trends affecting real estate.”

“We are seeing a growing emphasis on the impact technology has on all aspects of real estate, ranging from the changing behaviour of users to the real estate management and valuation process, and the new skills needed to successfully adapt to this new reality.”

The overall outlook for Europe remains strong, with over a quarter of respondents foreseeing an improving political environment in 2018.

Frankfurt, potentially a major beneficiary of Brexit, moved from third to tied-second in the table, following a surge of investment activity in 2017, which is expected to continue into 2018.

Conversely, London came in 27th, and bottomed the rankings table, based on change expected in rents and capital values. It is the only city in the survey that is expected to depreciate in both areas.

The survey concluded that investors don’t believe London will have much to offer over the next couple of years, having reached the peak in asset pricing and rental values, despite remaining a safe haven for Asian investment.

Other UK cities fared equally less favourably, with Manchester (20th) ranking as the only one in the top 20, as Birmingham came in 21st and Edinburgh 26th.

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