Marcus Lemli, Borja Sierra and Eri Mitsostergiou join host Guy Ruddle to predict which countries and asset classes real estate investors will choose over the next six months for the Savills podcast.

Predicting the countries and the asset classes that real estate investors will choose over the next six months is not an easy task which is why it’s necessary to take a pan-European view across geographies and markets.

Following discussions with colleagues in jurisdictions from Spain to Germany, the consensus is that investing in European real estate continues to be seen as a safe haven – with consistently higher returns than interest rates over the last 20 years – but that in times of hardening yields investors will have to try harder and look outside CBDs in core countries.

One sector we really think will come through this year in Europe is residential, including care homes and multi-family assets. While the UK has traditionally been a nation of home-owners, the majority of Germans and French, for example, rent for longer and buy later in life, if at all, and this trend is likely to come through in more and more European countries.

Logistics across Europe remains the flavour of the month (or even of the past few years), given the rise of online retail and the growing demand for storing the products we order over the internet. It’s not last mile delivery but the last 1,000 miles that make a difference as the sector continues to change and mature.

While opinions differ on where investors will invest, our Savills view is that student housing and offices in secondary German cities will continue to attract investors and that Iberia has recovered from years of recession and offers investors the returns they may not be able to get in Northern and Central Europe; taking the macro-view that  investors are starting to look at the fundamentals of a city, rather than a country, and are taking into consideration the local talent situation and what the infrastructure is like in order to make sound investment decisions.

One final point: those who invest against the trend are usually the ones who benefit the most if they do it rightly, which is why, despite the current media articles on the sector, the investor who gets retail right, by finding and/or repurposing the right assets in the right locations, will sit on the throne of real estate.

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