Property Market in Europe

The investors in real estates in Europe are optimistic about the real estate market in 2006. They expect it to generate good incomes, according to a report of Urban Land Institute and PricewaterhouseCoopers LLP.
According to the report, the expectations for investments of the capital market, as well as of the real estate market, are better in comparison to the previous year. The survey, which is based on the answers of 250 representatives of the sector, says that the investments in real estates still have greatest potential compared to other opportunities for investments despite the “phenomenal results” from the last year.
Among 27 real estate markets which are included in the survey, this is the second year when Paris is announced for the favorite of the investors. This market is characterized with very high prices because of the great interest of the investors. From one side, this decreases the level of income which the real estate market offers. This has made great number of investors to look for investment opportunities in smaller French towns as Lion.
Paris is followed closely by London, which offers small risk and sound prospects for income. According to the participants in the survey, the office segment offers good results for the next two or three years. The only weak feature of the real estate market in London is the commercial areas. Only 24 per cent of the inquired have recommended investments in this field, while 32 per cent recommend to those who have already bought such properties to resell them.
The real estate market in Helsinki takes the third position, while last year it was on the 6th place. The office and commercial areas are the most preferable investments. 65 per cent of the inquired people have voted for them.
The fourth attractive real estate market in Europe is Madrid. It is expected that there will be increased demand of properties for rent and industrial properties.
The real estate market in Barcelona, which in many respects offers better conditions even compared to Paris, is situated on the fifth position with regards to the complex factor of attractiveness. In some respect it is characterized by bigger risk, which is the reason why it is on this position.
Prague, Zurich, Hamburg, Budapest and Munchen are placed in the middle, as they offer average prospects for investments and contracting projects. Istambul, which was in the middle of the classification last year, has now dropped down, but it still attracts the interest of the investors. The real estate market in Moscow is on the 26th position – almost at the bottom.
The towns, in which the investors will probably look for new opportunities, are Varshaw, Moscow, Prague and Budapest for industrial real estates, Helsinki, Moscow, lion, Madrid, and Istanbul for office areas, as well as Istanbul, Prague, Budapest, Lion, and Helsinki for commercial areas. More than 60 per cent have recommended investments in this fields and markets.
One of the most significant changes in the investors’ attitude is their attitude towards risk. More and more investors are ready to take the risk and invest in real estate markets, such as Central Europe, for example.
With regards to the types of ownership, the commercial parks and centers are expected to bring biggest return of the investments during this year. The hotels are classified to third position. Objects with compound use, which form a new category, are situated on fourth position, and the residential buildings – on seventh position with regards to the income received, but on second position regarding the increase in rents and balance of demand and supply.
During the last three years in Bulgaria there was high interest from small and average investors. The big investors were attracted to Bulgaria in the last year. These are high-class investors, who are looking for projects and opportunities to invest in real estates for over 10 million and even over 50 million Euros. Such investors are interested in bigger investment projects as well, with which Bulgaria can attract the attention as a market on a European level. There are three opportunities for development. One of them is demand with regards to the development of land. The second one includes ready objects with tenants, and the third one is related to big hotels with potential for development. The third is realized together with an additional investment program, and as a result the category of service and the benefit are increased.
The real estate market for land is most interesting and is an important factor at the present moment in Bulgaria. It is spread in a lot of regions in the country, where there are good prospects for returns. It is manly a question of buying big plots of land and building whole complexes of properties from second-home type, industrial objects and hotels. Bulgaria disposes of many terrains which are proper for such projects.