Core, Core+ opportunities

• Overall, core investors should continue looking at prime offices in European capital cities, including Amsterdam, Barcelona, Bucharest, Copenhagen, Dublin, London, Luxembourg, Madrid, Milan, Paris, Prague, Stockholm and Warsaw. Due to the limited availability of quality products and high price level in some CBDs, prime office schemes located in peripheral areas well-served by public transports will increasingly become attractive. From a tenant perspective, increasing traffic congestions in city centres, the lengthening time to commune and the quick adoption of new flexible ways of working, all suggest a need for less centralised business centres. Regional cities with strong office rental growth prospects, such as in the UK, should also be considered, as they offer competitive prices.
  
  
• Rising e-commerce is driving demand for logistics space in the major German logistics regions where we expect rents to increase above the long-term average going forward.
  
  
• In Helsinki and in the major Portuguese touristic cities, hotels have seen record occupancy levels, thanks to the growing number of tourist’s arrivals, notably Chinese overnights. In Portugal, rebranding of existing hotel units provides a margin of growth of the average price per room.
  
  
• In Sweden and in the top four Dutch cities, where urbanisation trend is strong and the housing shortage severe, prime residential properties offer great opportunities for core investors seeking secured long term income streams assets types.

Value-add opportunities

• In Lisbon, Luxembourg, Paris and Stockholm, where solid fundamentals support good prospects for future office demand, office development or office refurbishment in both prime and nonprime locations, provide good upside opportunities for value-add investors.
  
  
• In the Czech Republic, Denmark, Netherlands and Poland where the e-commerce penetration rate is high and/or online sales are growing fast, good logistics schemes are becoming scarce, which will continue to put upward pressure on rents.
  
  
• In Helsinki, there is a real potential to convert secondary office buildings in apartment blocks. Both the strong demographic trend and the accelerating migration in Helsinki increase the demand for apartments. Rising population in the capital region of Denmark is leading to a growing need for new dwellings. Hence, forward funding residential deals provide good opportunities for value-add investors.
  
  
• Some retail assets should also be considered by value-add investors as long as the scheme is dominant in its catchment area. Increasing retail repricing in some European countries, notably in the UK, bring to the fore some opportunities for good values. In Germany, repositioning of old and underperforming but well-located shopping centres are alternative options for value add investors. In the Irish market, suburban retail parks have been the star performers with yields for prime assets compressing by 100bps over the last 18 months and rents now rising by 6.5%pa.

_{Read the articles within Spotlight: European Investment 2019 below.}