Property investors cite London as top target in 2012

Property investors in Europe view the UK as the most attractive market for purchases in 2012, while London stands out as the single most attractive city, according to research by global property adviser CBRE.

CBRE's latest Real Estate Investor Intentions survey, completed by more than 340 leading property investors, provides insights into investor sentiment towards international real estate markets and forecasts activity for the year ahead.

The CBRE survey found that the UK is the most attractive real estate market for investment in Europe for nearly a third (31%) of investors - very close to its position in 2010, but up significantly from 16% in 2011. Germany was the second-most attractive market, selected by 27% of investors, followed by Central and Eastern European (CEE) markets with 19%.

France is recording lower investor attraction than in 2011, while the proportion of investors choosing Spain as the most attractive market dropped from 9% in 2011 to 3.5% this year. Italy was favoured by only 2.5% of respondents. Conversely, the attraction of the (mostly non-euro) Nordic markets increased: chosen by 8% of respondents as the most attractive for real estate investment this year compared with 5% last year.

London emerged head and shoulders above other named cities as the top target for investors in Europe, with 37% of investors pinpointing it as the premier investment destination in Europe in 2012. The second-most popular city was Warsaw (12%), reflecting that market's strong economic fundamentals, with Paris in third position (9%) followed by the German cities of Munich (8%) and Berlin (7%).

London in particular is seen by global investors as the key European location for property investment, with its liquidity, prestige, size, stability and transparency viewed as key drivers, as well as being a springboard location for investment into other European property markets.