According to a recent joint assessment by partners of accounting company PricewaterhouseCoopers and the Urban Land Institute, most real estate markets in Europe will be ailing this year. apartment for sale in qatar
According to Emerging Trends in Real Estate 2011, released by London-based PwC and the Urban Land Institute, Europe's real estate business will face tougher regulations, austerity Europe, the sovereign debt crisis, and a still-tight financing market in 2011. (ULI).
Based on the opinions of 600 industry experts, the highly renowned commercial real estate prediction predicts that 2011 will not be the turnaround year that the European real estate market had hoped for.
Instead, a "two-speed" market, reflecting the expanding disparity between investment hotspots and second-tier property markets, is most likely to emerge.
More industry downsizing is expected across the continent, according to respondents.
"In future years, we may look back on 2011 as a pivotal year for the property business," said John Forbes, a PwC partner and one of the report's authors. Professionals in the real estate industry are facing a difficult time.
"Traditional sources of funding will not be accessible for refinancing properties with vacancies or in need of rehabilitation, though new sources of finance in the form of sovereign wealth funds and insurance corporations are expected."
The ongoing shrinkage of the sector will be a major theme, and those who are best able to manage their assets, rather than those who make intelligent stock selections, will emerge as victors."
"Some of the characteristics we observed last year, such as a flight to quality and a divided market, with significant demand in the best assets in the global gateway cities and minimal interest elsewhere," said Patrick L. Phillips, chief executive officer of ULI.
"The fundamental difference in this year's report appears to be the perception of the government's inability to stimulate demand or alleviate industrial distress."
"Equally obvious is the focus on asset management's hard work: repositioning buildings to better meet market demand, innovative techniques to sustaining and enhancing value, and effective and efficient property management."
"Last year, the industry was concerned that the large amount of debt maturing across Europe over the next five years would prevent banks from undertaking new lending, but the new questions for 2011 are how much of an impact Basel III will have on banks' appetite to lend to property, and how expensive this debt will be when they do."
"Even within the same country, respondents expressed grave concerns about locations outside of prime locations. With capital being so risk adverse, winning cities such as Munich, London, and Paris will continue to absorb investment as the only areas with strong tenant demand.
"Istanbul, Stockholm, Berlin, and Hamburg are expected to be other investment favorites." Dublin, Athens, Lisbon, and Budapest are likely to be avoided by investors.
"Investment will be drawn mostly to prime buildings, even within the most preferred markets," the research forecasts. As a result, secondary property prices will remain distressed and will continue to drop in the months ahead."
The good news, according to the analysis, is that this year will see an increase in the availability of real estate equity.
"A growing number of investors from Asia Pacific, as well as institutions such as insurance companies and private equity firms, are likely to contribute to this."
"However, even if new players do emerge, the assumption is that they will take a long time to do so and will only partially relieve congestion."
"They do not constitute unqualified good news," Forbes continued, "as is the case with so many positive trends nowadays." Equity, which is becoming more selective and risk adverse, will be directed to a smaller segment of the business, ensuring that the capital-raising environment will remain difficult for some time."
While all property sectors indicate increased investment possibilities in the survey's quantitative section, central city offices, street retail, and shopping complexes are the most frequently mentioned as having the best prospects.
According to interviewees, well-established enterprises with defensive strategies would do well in the months ahead, while niche or emerging players' prospects are less promising.
As companies focus their resources in 2011, those in the sector who have certain abilities will be in high demand. The predicted downsizing will reflect the exodus of people who are completely unprepared for the new environment.