Ernst & Young: Boost for Europe’s real estate markets

By Rob Starr, Content Manager, Big4.com

Across Europe, confidence among real investors has risen as they look forward to the next 12 months according to Ernst & Young’s Real Estate Investments Indicator 2013 out today. Most of the 500 European investors in real estate assets interviewed in late 2012 agreed that transaction volumes look set to rise this year thanks to increased cross border transactions and ongoing inflationary pressures. However, there are mixed fortunes by country for M&A in the sector.

Almost three-quarters of investors surveyed say that the continued weakness in the Eurozone economy will strengthen European investors’ activity in the real estate markets. This highlights the ongoing flight into real estate assets by investors around Europe. This is a reversal from a year ago, when the appetite for such transactions was limited as investors waited to see how the crisis would develop.

However, the picture varies across the continent. Certain non-Eurozone countries, such as the UK, are currently comparatively more attractive for real estate investments than certain Eurozone countries. Similarly the southern and some peripheral European real estate markets are viewed with relatively more caution than central or Northern European markets.

Across Europe, nearly three-quarters of respondents expect transaction volumes in 2013 to exceed levels seen in 2012, with only respondents in Italy disagreeing that volumes are likely to increase.

The average size of deals is also expected to rise, according to the majority of respondents, with just Spain and Italy predicting little improvement in deal size.