Alexandra Gomes, Senior Analyst at Savills Portugal’s Research Department, explains that «with the office segments located in central areas, heading the investors’ preferences’ list, the lack of offices, gave rise to new approaches and strategies for chosing assets which are more and more seen as desirable targets for a considerable amount of international investors».
Alexandra Gomes specifies that «the demand for plots to develop student residences reflects this change, where the so called traditional assets will have to compete with the new types of assets, which were created due to a needed adaptation to the new realities of work organization, of living the city and keep attracting investment to the cities». And she belives that «Lisbon and Porto increasingly reflect this adaptation and in 2019, the focus will remain on these two markets».
Offices will keep being the targets of choice
Savills predicts in this report that offices will remain «targets of choice» for the main real estate investors from all over Europe, especially in Germany and the Southern cities.
Eri Mitsostergiou, Director of the European Research Department at Savills, says that «the office market’s average prime yields are at a record low in Europe (3.65% during the 3rd quarter of 2018), however this product will remain one of the best options in 2019, especially for non risk strategies. In the same way, the average availability rates are at a low of 5.9%, with Berlin (1.4%), Hamburg (4.5%), Munich (2.5%) and Stockholm (3%) without virtually any offices available. In that sense, we expect for office prime leases in Europe to keep rising, on average 3.4% this year».
Logistics already represents 14% of investment
According to the consultant, logistics represents around 14% of investment in Europe and should keep growing in the next 12 months. In this segment, prime yields dropped to an average of 5.3% in Europe, which represents 148 base points below the last decade’s average. It is thus expected for occupants’s and investors’ demand to remain strong, since e-commerce keeps growing in all European countries.
Competition among cities accelerates
The specialist notes also that the «competition among cities to attract national and international investors will accelerate this year, Cities where local governments and market agents work together to develop new areas and rebuild the existing spaces, in order to create intelligent and livable communities, will stand out from the rest».