Germany Trumps UK as Top European Investment Location for Property

(January 25, 2011) — New research has shown that Germany has replaced the UK as the preferred location in Europe for investment in non-listed real estate funds.

The survey by the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) discovered that compared with last year when the UK ranked as a top property investment location, the UK fell to fourth place with Germany now the region of choice, as 36% of investors ranking German retail as their preferred intended location and sector for 2011.

“This is a dramatic change in sentiment,” Director Research and Market Information Lonneke Löwik said in a statement. Over the last two years the UK dominated the rankings with UK retail, UK office and UK industrial/logistics included in the top four most preferred country/sector combinations. While the UK remains well represented in the top ten, investors seem wary of higher property prices and a slower economic recovery in the UK but attracted by growing confidence in the German and other European markets.”

The boosted confidence in Germany as a top property investment location comes after the country’s economy swelled a record 3.6% last year. The survey showed retail real estate in Germany was the most favored type of property among investors, while office buildings were the third most popular.

Reflecting an attempt to diversify assets through a multi-country, multi-sector strategy, the research also shows that 90% of investors prefer a single-country strategy, up 13% from the previous survey.

The findings from INREV come from surveying investors and fund managers overseeing 981 billion euros ($1.3 trillion) of assets.