Savills. Real estate investment tips for 2021: EMEA
In times of uncertainty, investment strategies shift towards low-risk assets with defensive characteristics. In 2020, investors competed for core assets, driving further yield compression. Concern about the rising importance of teleworking has had a negative impact on demand for secondary offices, reducing the overall share of the office sector from 40% to 35% (Q1-Q3). The acceleration of digitalisation and technological use has spurred demand for industrial assets such as logistics and data centres. Stability of income from the residential sectors has attracted new capital, raising its share from 12% to 17% (Q1-Q3).
In 2021, we expect investment strategies to continue to focus on low risk and income stability. Sectors that have defensive characteristics and benefit from structural changes will capture most of investor focus. Availability of prime stock will determine sector allocation and competition for the best assets should keep prime yields low.