PWC has conducted a survey among the participants of the European real estate market such as real estate agents, representatives of investment agencies, developers, etc. Their opinion allows us to assess the current market situation and give an approximate forecast for the next year. By all accounts, the coronavirus has not turned the world upside down, but has only repeatedly accelerated existing trends.
The world economy continues to change the usual way of life of professionals and ordinary people. Along with attempts to adapt to the new conditions, investors appreciated the most and least promising areas of real estate for investment in 2021.
Most of the experts surveyed placed in the first positions those areas that benefit most from global digitalization. Thanks to covid (as wild as it may sound), the human masses have moved online: they communicate, work, and spend money there.
It is this activity that has made data centers the most promising properties. This is a fairly narrow niche, which becomes even smaller within the real estate issue. American colleagues agree with such an assessment, but suggest not to go full stream ahead in terms of investments, since the increase in the number of Internet services is no longer linear. From their point of view, you should not rely on a quick return on such investments. Especially now, when the market is changing unpredictably against the background of all world events.
The second place was taken by logistics infrastructure facilities, which play a particularly important role in online retail. The third place is given to the sphere of investments in the so-called "life sciences". This is due to the fact that the conditions of restrictions lead to the desire of people to increase their quality of life and living environment, including places of work and their own housing.
In continuation of the topic of science and technology, one of the most promising areas of investment is healthcare. With the global pandemic as a background, this area is particularly in need of additional investments and new technologies. As one of the brokers interviewed noted, the trend of investing in medicine has been particularly noticeable over the past five years in the USA, so now is the time for it to manifest itself in Europe.
The most reliable type of real estate for investment is recognized as warehouse premises. This should not come as a surprise: after the mass introduction of restrictions on movement in almost all countries, retailers have shifted to online sales. This segment no longer needs space for stores, but the need for storage and shipping of goods has become even greater.
Next in the rating of reliable investments is residential real estate for rent. Of course, the blow that hit resort properties last year had a negative effect not only on the owners, but also on the economy as a whole. However, long-term rentals on average showed high stability. According to European experts, residential real estate has become the most reliable sector for investors, where 99% of tenants made timely payments. Therefore, at the moment there is no reason to believe that this trend will change.
Another type of real estate that is only gaining is social housing and nursing homes. The average age of the population is growing, and the number of pensioners is increasing. And if no one has ever made money in this segment before, now it's time to think about the possibilities of such investment. Last year, we talked about a similar project in Slovenia and the principles of investing in it.
In the fight against coronavirus, student dormitories have lost many prospects. Moreover, the UK suffered the most, where this type of investment was already popular before. At first, the rent was frozen due to the fact that students began to return home due to the pandemic. And to this day, many of them still have not returned to the countries where they studied before. Another factor that reduced the prospects is online education, which does not require flights and search for housing on the spot.
The next segment of real estate that has lost popularity in 2020 is colivings. The format of a hostel, where people from the same social environment share the common spaces of a large apartment, could seem like a great option for young residents of a metropolis. But only until the authorities began to impose a ban on approaching each other. The risk of infection did not so much alienate people as make them think about moving out of town, to more secluded places, as happened in the Baltic States, Israel and Bulgaria. And communal apartments will wait.
This category also includes offices, coworking spaces, hotels, and shopping centers. And if the first two types of real estate simply received lower ratings, then the last two are already directly related to the risk zone. All places of public gathering first became dangerous for public health, and then for investors. It is still unclear how long it will take to stabilize this particular sector: the transition of business online, remote work, remote study, remote shopping, although they meet the spirit of the times, but do not give enough time to accurately predict future prospects.
|New energy infrastructure||5||4||2|
|Private rented residential||9||8||8|
|Housebuilding for sale||13||12||12|