SPAIN'S two largest metropolitan areas have been listed among the top 10 European cities to invest in property for yet another year – and both have risen in the rankings since the 2021 report.
Consultancy firm PwC, along with the Urban Land Institute (ULI), have published their most recent investment research findings and describe a 'post-pandemic leap in confidence'.
Barcelona and its world-famous Rambla de Santa Mònica. Spain's second-largest city is one of PwC's and the ULI's top 10 European metropolitan areas for property investment in 2022 (photo: Wikimedia Commons)
Commercial confidence in the property market is at its 'highest level since 2014', the report states, whilst also predicting 'profound changes' to the estate agency industry as a result of 'changing consumer demands, digitalisation and an ever-stronger ESG [Environmental, Social and Governance] agenda'.
Residential property ranks jointly with logistics as the top investments post-Covid, and 'green' energy infrastructure, 'life sciences and data centres' are, additionally, tipped to be increasingly sought-after.
“[A] need for organisational transformation embracing technology, skills and ESG [sustainability performance] is a key priority, according to 68% of estate agency leaders,” the article reads.
'Positivity, relief and short-term optimism' in the European property industry
Now in its 19th year, the Emerging Trends in Real Estate Europe report for 2022 considers the professional views of 844 property industry specialists, who largely found 'positive outlooks' had doubled in the past 12 months, 'reflecting a broad sense of relief and short-term optimism that the industry has remained resilient during the pandemic'.
But for the longer term, a widespread sense of uncertainty remains as industry professionals continue to 'come to terms with the radical changes to the business...brought about or accelerated by Covid-19'.
Madrid's business district and its iconic ‘Four Towers’, or Cuatro Torres. The Spanish capital also makes the top 10 for European cities to invest in this year (photo: Wikimedia Commons)
'Strong investor demand' is reported for 2022, and the analysis quotes Urban Land Institute Europe's chief executive, Lisette van Doorn, as saying that the continent-wide property industry is 'coming to learn' that the end of the major public health crisis caused by Covid 'is not a straight line'.
“There is pent-up demand from which to benefit, but [the industry] also needs to get to grips with what 'restarting the economy' really means,” says the CEO.
“The current uncertainties are reflected into quite strong sentiment swings while, at the same time, the industry is struggling to interpret the potential impact issues like supply-chain disruptions, surging energy costs and labour shortages will have...and how long these issues might last.”
Challenges the industry seeks to adapt to
PwC and the Urban Land Institute break down shorter-term uncertainties for business in general, and specifically for the property industry.
Online security is a concern for two-thirds of them, inflation for six in 10 surveyed and interest rates for 55%.
But the most pressing challenges perceived for the coming year are availability of suitable land and assets, for two-thirds; sustainability and decarbonisation or 'net zero' requirements, for 61%, and the biggest of all, availability of resources and the cost of construction, for 88%.
Cost and availability of building materials, leading to higher prices for new property and potential delays in delivery, are a key short-term issue for 88% of estate agency professionals interviewed
The latter is the most likely – although all have a potential – to affect keys-in-hand timescales and the price of new builds.
This is closely linked to Lisette von Doorn's 'supply-chain disruptions', as building materials have become harder to source and more expensive, affecting major civil engineering works as well as residential property construction.
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