Spain is the most popular of the ‘club Med’ economies for investors in European real estate, according to the latest INREV Investment Intentions Survey.

Spain is the most popular of the ‘club Med’ economies for investors in European real estate, according to the latest INREV Investment Intentions Survey.

According to the survey, 41.7% of fund of fund managers, 31.3% of fund managers and 22.6% of investors expect to invest in Spain this year. In general, however, Germany, France and the UK remain the most sought-after investment spots in 2014. Germany remains the top European country, with 58.3% of investors and 70.5% of fund managers expecting to invest there this year. The UK is the preferred location for cross-border investment. UK offices is the most popular country and sector combination, preferred by 45% of investors. Next comes the French offices sector (favoured by 44% of investors), followed by German offices (favoured by 43% of investors). Retail was the most popular sector overall for investors and fund managers, while there was a noticeable increase in interest in residential, suggesting that this sector is proving its viability. Investors expecting to reduce their allocation to non-listed real estate has nearly halved, dropping from 30.5% in 2013 to 18.5%. With the proportion of investors wishing to increase their allocation to non-listed real estate funds remaining almost unchanged from last year, the result is a higher net balance in favour of non-listed funds – notably from smaller investors – bucking the downward trend of the previous three years. Overall, investors expect to increase their allocations to real estate from 9.5% to 10.3% of their portfolios, the survey found. The report estimates that the 142 institutional investors participating in the study expect to invest almost €35 bn into real estate globally in 2014.