Developers plans to deliver total of 13,500 homes in West and South London in full swing

London named the second best city for property investment in Europe

Investors, developers, lenders and advisers have tipped London as a go-to destination for property investment and development potential in 2021.

Prospects for real estate and investment opportunities in the capital city for 2021 have seen significant improvement, says the latest Emerging Trends in Real Estate report from PricewaterhouseCoopers and the Urban Land Institute. The data shows England’s capital has jumped two places in this year’s estimations.

This puts this city in second place overall across Europe’s major cities, with Berlin taking the top position. Much of the report unsurprisingly focuses on the way coronavirus has affected the real estate sector. However, on a long-term basis, it describes the likes of London, Berlin and Paris as “stalwarts”. These cities, says the report, offer the best of both liquidity and stability.

Accelerating existing trends

One of the major findings of the report is around the acceleration of pre-existing trends. While Covid has been “game-changing”, the industry has adapted well because some of these shifts had already begun to occur.

Digitalisation is one aspect that has featured heavily in the recent pandemic. The industry was already undergoing big leaps towards more automated, technology-focused processes. Now, though, it has become a necessity for many, and is impacting investor preferences.

Lisette van Doorn, CEO of ULI Europe, said: “European real estate is at a turning point, trying to work out its future role in society while facing the cyclical challenges following the outbreak of the pandemic earlier this year and the ongoing uncertainty this creates.

“COVID-19 has fast-forwarded a number of trends already started, for example related to digitalisation, remote work and online shopping, but given the artificial environment amidst ongoing lockdowns and government support to employees and businesses, it remains hard to work out the long-term impact.”

“The search for yield, which is now even more dominant than pre-COVID, continues to attract investors to real estate, especially core and income-generating, such as residential that continues to appeal to investors, in the ‘safest havens’ across Europe.”

Investors look for stability in uncertain times

Logistics and housing have benefited in some ways from recent events, says the report. Demand in these areas has been relatively stable. This is another reason why the capital city  ranks highly among investors right now, thanks to the UK’s strong economy compared to other areas.

Many investors are re-examining the historical risk and return profiles of different types of property investment. This is according to Gareth Lewis, real estate director at PwC UK.

“It’s clear that, at this time of significant uncertainty investors continue to see Europe’s core cities as safer bets and there remains cautious optimism. With London jumping up two places to second in the rankings – despite the challenges faced by all major cities – many investors see the long-term value.

He adds that the low interest rate environment is also a positive for many investors. It means there could be an uptick in activity as people deploy their pent-up capital over the coming months.

Moving away from office investment

There has been an unprecedented rise in the number of people working remotely over the course of 2020. While it is difficult to say how this will play out over the long term, the report says this is a big influencing factor on how people are choosing to invest.

The data shows that residential property investment remains “highly favoured” by investors. In a ranking of the top 10 sectors for investment in 2021, there are three representing residential. These were private rented housing (ranking in 7th position overall), affordable housing in 8th place and social housing at number 10.

The report notes that no office sectors made it into the top 10 list this year. Flexible and serviced office space and co-working has also suffered in the ratings. Time will tell whether these areas become more important again in the future.

You can read the full report here.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT