FRANKFURT-The year 2011 should be good for real estate across Europe, and sovereign wealth funds are likely to be among institutions expanding investments fastest, according to Jones Lang LaSalle’s EMEA CEO Christian Ulbrich.

Ulbrich said a recent local summit that he thinks it will be a good real estate year in 2011. “Seldom have we seen so many factors that indicate a positive outcome for property over the year… Among market participants the fastest growing investor sector in the next few years is going to be sovereign wealth funds, and London and Paris are likely to profit the most.” He forecast that Europe will see more SWF deals like the purchase of the Berlin Sony Center by Korea’s National Pension Service.

In markets, Ulbrich forecast that London will continue to decouple from a weak UK economy while Paris will outperform tepid French growth. He quoted a recent conference where 43% of attendees saw Germany as the premier investment destination. “User demand should recover further, with a relatively strong expansion need for firms although they will retain high cost sensitivity. An increase in investment volumes is to be expected… However because of the supply situation there is no reason to expect entry yields will do anything but remain stable.” Ulbrich said the negative mood surrounding German open property funds is likely to lift. “Neither should we become too worried about regulatory issues such as Basel III or Solvency II, since these are unlikely to be nearly as restrictive as some people expect.”