Emerging Trends in Real Estate
But Berlin is tipped to be the worst performer. Kathleen Gimblett, business economist at Economics and Investment Research and one of the report's authors said: "There's oversupply all over the place in Berlin. German companies aren't running to relocate there and they won't until there is an international airport."
In terms of property types, no single sector is expected to produce outstanding returns in 2004. Shopping centres and residential are the two favored sectors for investment and development, with city center offices, manufacturing and business parks projected to be the weakest sectors in 2004.
But overall the outlook is buoyant for European real estate investment. The German open-ended funds are still awash with cash—on some estimates they have as much as EUR30bn ($38 billion) of cash that has to be invested in real estate assets. But US-led opportunity funds are also waiting in the wings with as much as EUR23bn ($30 billion) of firepower to invest if there is a correction in property prices.
During 2004 the opportunity funds are expected to focus on the sale/leaseback market for both government and corporate real estate, where they can bring their financial engineering skills to bear, according to Gimblett.
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