The consultancy firm Colliers believes that 2024 will be a challenging year for the real estate sector across Europe. However, it will also provide investment opportunities in some cities and sectors.
According to its forecast report, "Over the coming year, differences in price expectations between buyers and sellers should narrow markedly and lead to a revival in real estate investment". It also stresses that "pockets of opportunity continue to emerge".
According to the consultancy firm, Madrid is among the six favourite cities to invest in real estate in the coming year, along with London, Paris, Berlin, Munich and Amsterdam. It highlights industrial, logistics and multifamily units as the most interesting assets, as well as the hotel sector in Spain.
However, the study states that the key to the year will be stability. "Investors are clear that stability is key. With higher interest rates expected for longer to combat inflation, real estate investment prospects are moderating. If greater certainty emerges, coupled with softening underlying valuations, that will drive additional transaction volume next year. The best-positioned investors will be those prepared to take advantage of the opportunities," says Luke Dawson, Head of Global and EMEA Capital Markets at Colliers.
The consultancy firm highlights that logistics and industrial sectors will continue to be in high demand and that there is a supply shortage, as well as sound fundamentals. In addition, it explains that "protectionist industrial policies in many European countries and rising energy costs will encourage further offshoring of logistics and industrial projects", which will be an additional attraction for investors.
In the case of the multifamily sector, Colliers insists that "the imbalance between supply and demand caused by population growth and issues of housing availability and affordability will underpin investment activity in this sector in the future. Many investors are still interested in investing in alternative housing linked to demographic trends, such as coliving, student housing and senior living.
He also sees potential in alternative assets, noting that "the good performance of sectors linked to technological and demographic trends will continue to capture investor appetite in the face of the existing imbalance between product supply and demand. We, therefore, expect to see increased investment in assets closer to infrastructure than traditional real estate, such as data centres, renewable energy and healthcare."
In the case of offices, the market will focus on well-located, sustainable and quality assets, which are generally in short supply. Colliers believes that the price gap between prime and non-prime offices will continue to widen in the coming months and that "remodelling and repurposing assets to meet sustainability criteria will be an important driver of activity in the coming year and beyond".
Lastly, the consultancy firm believes that the hotel sector will continue to perform positively in terms of investment in Spain, thanks to the strengths of the domestic holiday market compared to Europe.
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