Savills has ranked the UK, which accounted for some 42% of total European investment volume in 2010, as the top investment market in Europe, followed by Germany, France, Sweden and the Netherlands. In terms of top cities, the international real estate adviser rates London, Paris, Stockholm, Berlin and Hamburg as the top five destinations respectively in terms of investment volume.
Savills has ranked the UK, which accounted for some 42% of total European investment volume in 2010, as the top investment market in Europe, followed by Germany, France, Sweden and the Netherlands. In terms of top cities, the international real estate adviser rates London, Paris, Stockholm, Berlin and Hamburg as the top five destinations respectively in terms of investment volume.
The firm predicts that Poland, which ranks ninth on Savills investment market list, will continue to see increased interest from international investors in 2011. It cites the country's strong GDP prospect as a key driver with 4.2% annual growth on average forecast over the next five years and an expected 4% rental growth in Warsaw’s prime offices by the end of the year.
Savills suggests traditional property fundamentals remain a key driver for the focus on core countries and suggests that the occupational stability and rental growth predictions of Stockholm have positioned the Swedish capital as a lower risk destination and a top three city. Sweden's investment market is showing strong recovery with investment volumes reaching SEK 113 bn (EUR 13 bn) in 2010, up by 95% on 2009, according to Savills data, representing a 135% rise in foreign investment in the past year.
'We have seen the UK dominate the investor's shopping lists for a while with France and now Germany also firmly on the map,' said Giles Wilcox, Savills' head of European cross-border investment. 'The markets of particular interest that have more recently come back into focus are Sweden and Poland. The fact that Stockholm now ranks third in terms of investment volumes for last year will be a surprise to some people and we anticipate more international players will show interest in the city due to Sweden's strong GDP growth prospects and the fact its occupational market has impacted to a lesser extent than many of the core countries.'
While the UK continues to attract investors with a healthy average GDP growth prospect of 3% pa from 2011-2016, one of the best within western European countries, the GDP in France and Germany is expected to grow by 2.1% pa on average over the same time period. Savills also reports that both these hot spot countries offer particularly good rental growth prospects in the key cities - 6.8% in Hamburg, 6.7% in Paris IDF, 5.3% in Berlin, 3.4% Munich, 2.1% in Düsseldorf and 1.4% in Frankfurt.
