Savills predicts that core and core+ real estate investors will continue to be attracted by high specification office buildings in key European CBD locations with low vacancy rates such as Berlin, Munich, Paris, Stockholm, and London this year. 

The international real estate advisor also anticipates that convenience retail and last-mile logistics assets in densely populated areas, and high specification logistics warehouses in markets with high or rising e-commerce penetration such as France, Germany, Spain, the Netherlands, the Nordics, and the UK, will continue to attract this group of investors. Multifamily assets in cities and regions with supply shortages such as the Randstad (Amsterdam, Rotterdam, the Hague, and Utrecht) in the Netherlands, Stockholm, Paris, London, and multiple German cities will also remain key for investors.  

Savills top picks for value-add investors this year are logistics developments in undersupplied markets such as the Nordics and Spain, short-term income sectors such as flexible offices and student housing, which are likely to recover in the second half of this year, and multifamily developments in markets with rising demand for rental such as Southern and Eastern Europe. Overall, with a number of European countries have introduced stricter environmental building standards in recent years, another investment opportunity is the renovation of buildings to meet higher green standards.

Opportunistic investors may be able to repurpose secondary offices into residential assets, and purchase distressed hospitality assets in tourist destinations this year, according to the international real estate advisor. One of Savills top picks for alternatives in 2021 is science parks in core European university clusters in Denmark, France, Germany, Sweden, and Switzerland. Others are healthcare, senior housing, and care homes in countries with an aging population and available products, such as Belgium, Finland, France, Germany, Sweden, and the Netherlands. Furthermore, data centers in markets with strong fundamentals and infrastructure, such as Amsterdam, Frankfurt, Paris, London, and the Nordics are likely to remain attractive this year. 

(WBJ)