Outlook 2013: Retail tops investors’ wish lists

Retail is the most popular sector for acquisitions across Europe this year, according to the ULI/PwC Emergnig Trends report.

The report, which polled the views of 500 real esate professionals, found that 385 respondents favoured the retail sector, followed by offices (377), apartments (299), hotels (175), and industrial (137).

Despite weak consumer confidence across the region, retail sales are holding up in cities like Moscow, Warsaw, London, and Vienna. Shops in luxury shopping quarters, city centres, dominant regional shopping centres, or malls offering retail and leisure are set to benefit most.

Europe’s office market continues to be divided into prime ‘and the rest’. Offices in CBD and other core locations are benefiting from the flight to safety. As a result, competition for prime is fierce while secondary offices languish.

Office buildings in good locations sold by stressed owners will also provide opportunities. In troubled southern European markets like Lisbon and Madrid, refurbishing existing stock is a risk-averse way of delivering new space to the market, while in Rome, offices are being converted to other uses.

Demand for high-quality, efficiently managed, and well-located industrial property is robust but product remains scarce.

For residential investors, especially in the UK and Germany, 2013 will be a ‘key year’, says the report. Alternative assets - from nursing homes to assisted living facilities and outpatient care - are gaining traction.

Pension funds in particular are allocating to more alternative real estate - as well as infrastructure - in their search for assets that match their liabilities and offer a better yield than government bonds.

Click on the pdf below to read our roundup of key points from the Emerging Trends report