A study by Colliers assures that housing deals in Europe will accelerate in the final stretch of 2020
Real estate investment is beginning to revive in Europe, with a promising outlook for those wishing to invest in property in Spain's capital, Madrid. According to a study by the consultancy firm Colliers International, the signing of real estate transactions will accelerate in the last quarter of the year and the volume of investment could reach around 100 billion euros, coinciding with the need for investors to take advantage of their liquidity before the end of the year and the improvement in confidence on the part of sellers.
If the forecasts are correct, the year would end with around 270 billion euros invested in the European real estate market, which translates into a drop of 14% with respect to last year, "provided that the market remains in its current stability and is not subsequently affected by a worsening of the impact of the pandemic on Europe's leading economies," the firm explains.
Its forecasts are based on a survey of global investors, who were asked about the potential of the different assets and markets, as well as economic developments in the wake of the COVID-19 crisis.
Based on the responses, Colliers states that 95 out of every 100 investors expect the market to recover within 12 months (which translates into a more optimistic scenario than that foreseen to date for Spain), and that housing remains at the centre of investment strategies, along with logistics and health-related assets.
Within housing, investors continue to be interested in the build-to-rent sector, and place Madrid among the European markets with most opportunities in this field. Cities such as Paris and London, where 'core' assets are becoming cheaper, and countries such as Germany and the Nordic countries, which are leading the recovery of the European market, will also play a leading role.
On the other hand, the retail and hotel sectors are becoming less attractive as they face major challenges. "In retail, many small operators will not prevail in their current form and a severe adjustment is foreseen for these small businesses as the market stabilises in the next 12-18 months," explains the study, which also insists that the hotel sector "has been severely affected by the pandemic and is unlikely to return to pre-COVID levels until the end of 2022 at the earliest".
In the case of offices, Colliers rules out large price drops in the future, considering that their role "is vital in boosting turnover and the economy and will not change substantially", regardless of the boost given to teleworking by the coronavirus.
Nevertheless, the company insists that the current situation in Spain and across Europe is still marked by uncertainty and that governments must balance measures to contain the virus, which means restricting mobility, with a boost to economic recovery.
"The market is still fragile and external factors could cause the investment market to return to turbulence, with a view to the US elections in November and a second wave of the pandemic in Europe. However, if the impact of these factors is minimised and a stable environment prevails, we could see investment volumes in the 4th quarter that are double those of the 2nd and 3rd quarters," concludes Colliers.