Finance Monthly December 2019 Edition

28 www.finance-monthly.com FINANCE & BUSINESS - REAL ESTATE IN EUROPE Despite the uncertainty, the need to find secure and stable income is still a priority for investors and Europe’s real estate industry does offer substantial potential to achieve this in 2020, even as it moves through the ongoing late cycle. Investors are certainly seeing potential in the logistics sector, for example, which has been expanding for some years now, thanks to increasing urbanisation and the continuing growth of e-commerce driving the need for the provision of first-rate distribution centres. The offices sector is also growing as central business districts are developed in several major cities across Europe while it is no surprise that German cities are regarded as investment hotspots by global investors, who value the safety afforded by scale, liquidity and growing markets. The same applies to Lisbon because of its attractive development and investment opportunities. Additionally, increased investment flows are expected to come from Asia, and especially Japan. But with the wider economy slowing, the reality is that although global investors remain positive about real estate, there are familiar concerns surrounding the scarcity of attractive assets. Indeed, most markets are certainly quieter at present than this time last As a New Year and indeed decade approaches, there is growing consensus that Europe’s real estate market is entering the last stages of the current investment cycle. The US vs. China trade war, Brexit and geopolitical risks in the Middle East have contributed to a slowdown by generating market uncertainty over the last year. Although Europe’s economy may avoid recession, growth is widely expected to remain subdued over the next 12 to 18 months and there are lingering questions about how much further the cycle has to run. Rosanna Woods, UK Managing Director at Drooms, explores the future of the real estate industry in Europe. EUROPEAN REAL ESTATE ASSETS REMAIN ATTRACTIVE DESPITE GEOPOLITICAL UNCERTAINTIES Rosanna Woods UK Managing Director at Drooms www.drooms.com