After a slow first quarter, there has been a resurgence of interest in property markets in the second quarter amid growing investor confidence in the region’s recovery prospects. Key markets saw a return of the big-ticket Capital Markets office transactions absent in Q1, while momentum in the industrial and logistics sectors continued to build in the expectation that the online delivery demand created by lockdowns is here to stay. Despite the leisure sector remaining relatively subdued, investor interest in hotels is also visibly picking up in places, notably in tourism hotspots such as Italy and Spain.
With vaccine rollouts increasingly allowing a degree of ’unlocking‘ across much of Europe, confidence is returning, particularly among international investors. In the UK for example, overseas buyers accounted for 60% of all activity by value in Q2, compared to 51% last year. In many markets, demand outstrips - and will continue to outpace - supply, with strong investor appetite for core assets compressing yields. The private rental sector (PRS) remains the focus of investors in countries such as Ireland and Poland, as demand for private rental accommodation rises.
Though public and regulatory resistance to PRS investing is becoming more of a factor in some markets, demographic trends are set to keep activity in the sector vibrant. We expect further major transactions across key markets in the second half, as more investors explore the wide range of opportunities emerging in a region that appears well-positioned for recovery.
To find more regional and market by market insights please access our latest EMEA Markets Snapshot Capital Markets Q2.