Christopher ZeniosEurope has experienced a general slowdown due to the global economy, political conflicts, trade wars between continents that affect the manufacturing industries and of course the never-ending Brexit situation that weighs down on private investment.
The UK and Germany have been hit particularly hard in this sector. Britain notably saw investment volumes decrease by 33% during the final quarter of 2019. Whereas Germany had it hard due to various situations in the automotive industry.
Real estate strategist at UBS Asset Management Real Estate, Fergus Hicks, expresses on behalf of his firm:
With an election looming on 12 December and Brexit still unresolved, uncertainty hangs over the UK. However, foreign investors are waiting in the wings, looking for a possible currency play and ready to act if the Brexit fog clears.
The real estate investment activity in Europe as a whole has dropped by 6%. One of the few European countries not to be affected much by the downslide was France where investment volumes went up by 16% due to Paris attracting more serious investors and accumulating the most cash during this period.
Countries like Spain and the Netherlands saw drops of approximately 9% while Italy showed progress in the real estate sector. The Netherlands also saw returns slow to 13% from 15% during this period, despite having a “strong performing market.”
Fergus Hicks continues:
With returns slowing in most markets, we think they will converge to around the 5% p.a. level over the next three years, with little significant differentiation between markets.
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