Istanbul real estate returns likely to surpass London
14 March 2008
Moscow and Istanbul real estate investment returns are likely to surpass Paris and London on optimism faster growth in emerging markets will push up rents and fuel demand for property, according to a survey of PricewaterhouseCoopers LLP and the Urban Land Institute. Greek capital Athens is ranked in the last three positions (in the 25th place) regarding the prospects of the real estate market.
The study, conducted by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, said that booming rental growth and a wealth of retail and office market opportunities has catapulted the Russian capital to the top of the rankings.
The elevation of Moscow, where the report said nobody had even "begun to scratch the surface" of opportunity, has helped to knock long-time favourite London out of the top ten.
The city, which has been hit hard by global financial market volatility, plunged to 15th place for investment prospects and 13th position for development prospects, according to the fifth annual Emerging Trends in Real Estate Europe report.
The report, which covers 27 markets in countries throughout Europe, is based on surveys and interviews with nearly 500 of the industry's leading participants. The survey ranked Istanbul as Europe's second most-promising market, with one describing Turkey as "the India of Europe".
Greek capital Athens is ranked in the last three positions (in the 25th place) regarding the prospects of the real estate market. The reasons are the “difficulties in the land development projects due to the lack of available properties and the growing tendency of construction companies to look for investment opportunities outside Athens”. Real Estate experts are not optimistic and point out that change in the Greek market is progressing with a very slow pace.
It's the first time the annual survey hasn't ranked London among the top 10 cities in Europe for investment and development. U.K. commercial real estate prices fell in 2007 by the most in 17 years, according to London based research firm Investment Property Databank Ltd. Property appraisers are lowering valuations as demand for space from banks and securities firms declines amid credit-market losses and write-downs caused by the collapse of the subprime mortgage market.