Real estate prospects in southern European capitals are seen improving in 2022, according to the latest report put together by PwC and Urban Land Institute, though volatility in the sector remains.
Based on a ranking of 31 European cities included in the annual “Emerging Trends in Real Estate – Road to Recovery” report, the outlook in Spain, Italy and Greece improved in the last year. Topping the list is London, followed by Paris and Berlin.
“Madrid has moved up two places to sixth, with a score that now rivals the leading German cities. Interviewees point out that it offers good opportunities across sectors, such as residential and logistics, as well as a strong office market,” says the report.
Rome climbed to position number 21 (from 23rd) and Athens advanced to 23rd place (from 28th place).
On a second ranking assessing expected changes in rental and capital values in 2022, Athens took first place.
“Relatively few survey participants are active in the Athens market, but they believe the city offers some of the strongest growth prospects anywhere in Europe. This relates not just to the potential recovery of tourism, but also to Greece’s relative political stability compared with Turkey," says PwC and ULI.
The report goes on to cite one private equity investor who says: "Greece, for the first time in decades, has a stable, probusiness government. This stability is set against a contrasting situation in Turkey."
In terms of broader property trends in Europe, the annual review points out that there is a clear upturn in confidence but that volatility and uncertainty continues amidst high inflation and supply chain problems.
“The biggest current uncertainty relates to inflation and supply chains, impacting mostly construction prices and delivery schedules, just at a time when the industry wants to resume delayed developments or advance repurposing initiatives," it says.
“As a consequence, we are seeing strong sentiment swings, as the industry struggles to interpret the potential impact of supply chain disruptions, surging energy costs and labor shortages on real estate, and how long these issues might last," it adds.