5 Things to consider before investing in European Real Estate

We all understand that investing in property is a great way to grow the value of your assets both for professional as well as personal use. Not only does it put money into a country's economy, but it can also produce a good return for your investment.

When we think of investment we immediate think of returns we are going to get on our investment. Apart from this we should not forget the amount of bureaucratic red tape involved while investing.
Who the investor is and the reason for investing can make the same city a great investment prospect or completely unacceptable. Like for example, a university town with a steady stream of students looking for rental properties may be of no interest to development companies or high-wealth individuals, but would be perfect for a grad student. Likewise, we all have different reasons for wanting to invest in property.

Here are a few things to consider before investing in the European Real Estate. 

1. Investors need to focus on tech hubs and locations favoured by the creative industries. Currently there seems to be a rapid growth in the IT and creative industries driven by social networking, on-line advertising, etc. A good way of gaining exposure is to invest in established tech hubs like, Bonn, Karlsruhe, Reading, Stockholm, Utrecht, university cities like, Augsburg, Cambridge and districts favoured by high-tech start-ups like, Old Street - London, Silicon Allee - Berlin.
   
2. Investors need to avoid markets with high vacancy rates, as it is likely to take several years of sustained economic growth before property markets with high vacancy rates (e.g. Amsterdam office, Frankfurt office, Lyon industrial) get back to equilibrium. In general rents in these markets are less likely to recover before the second half of the decade.
   
3. Before investing one has to constantly keep monitoring property markets in peripheral Europe. You have to be cautious about investing in peripheral Europe (i.e. Greece, Ireland, Italy, Portugal and Spain) over the next few months because yields are likely to rise further in parts of those markets. Moreover the retail market in Northern Italy has a number of fundamental attractions (e.g. wealthy households, low provision of modern retail space, etc).
   
4. Investors must consider taking risk that comes with the market fundamentals. Stronger economies, such as the Nordics and Germany will absorb space at a faster rate than most of Europe. Assets that offer active asset management strategies in these locations should offer interesting opportunities for investors.
   
5. Invest in global facing economies and locations. Given widespread government austerity and household de-leveraging, we favour those cities and locations in Europe which are plugged into the global economy. This includes international hubs for financial and business services (e.g. London, Paris), cities in export-orientated regions with strong trade links to emerging economies (e.g. Munich, Stockholm, Stuttgart), tourist hotspots benefiting from growth in Asian tourists (e.g. Berlin, Milan) and major ports benefiting from the growth in world trade (e.g. Hamburg, Rotterdam).

While the world economy is constantly changing, opportunities to invest in European Real Estate are always there. It is for investors to carefully consider the different aspects before investing.
And if you dont consider to be a risk taker you don’t have to buy a property yourself. You can invest in companies that are developing properties or put your money into funds with real estate in their portfolios.

Written by: Agnes Tom for European Lists
List Source: European Real Estate Email List
Contact: +(44) 800 088 5190
Email: info@europeanlists.com  


Additional Sources:
http://www.schroders.com/en/media-relations/newsroom/all_news_releases/schroder-property-shares-top-10-tips-for-european-real-estate-investing/