Report reveals Dublin sixth most active real estate market in Europe

02 December, 2020

  • Prospects for real estate investment in Dublin remain favourable
  • In Europe, real estate is garnering some returns in a global downturn, with domestic investors set to come to the fore
  • Deal concerns across Europe
  • ‘Digital switch’ impacting sector preferences - data centres, logistics, life sciences front-runners, with traditional mainstay sectors struggling                                                 
  • ESG is gaining interest since the pandemic
  • Investment in cities believed to offer stability, with Berlin topping the list
  • Caution on outlook but ‘pent-up’ capital waiting to be deployed
picture of apartment block Dublin.

These are some of the key findings from the 2021 Emerging Trends in Real Estate® Europe report, published annually by PwC and Urban Land Institute (ULI).  In its 18th year, the report ranks 31 European cities for investment and development potential as well as ranking sector prospects.  It is based on the opinions of 995 real estate professionals across Europe, including investors, developers, lenders, and advisors. 

Prospects for real estate investment in Dublin remain favourable

Dublin is the sixth most active market for real estate in Europe in terms of capital invested – with €6 billion of capital inflows - after London, Paris, Berlin, Munich and Frankfurt. Dublin also moved to 11th position for overall real estate prospects, up from 12th position last year out of the 31 European cities ranked. Opportunities for real estate investment in Dublin and Ireland continue, particularly as we see below zero interest rates.  

Joanne Kelly, PwC Ireland Real Estate Leader, said: “Similar to European trends, the dynamics in Irish real estate have also shifted dramatically, amplified by the pandemic. COVID-19 has accelerated structural trends, seeing a change away from retail and office, towards the alternative sectors such as data centres, life sciences and health, energy and communications infrastructure. These areas, along with industrial property and logistics warehouses, will all benefit from growing demand in this new environment and a wall of capital we’re seeing ready to deploy. 

“The prospects for real estate investment in Dublin remain favourable. Demand in Dublin for private rental residential and student housing remains strong. However, there is concern about Dublin’s office market, where take-up is sharply down. Vacancy levels are likely to increase as new stock is completed, which could lead to downward pressure on rents. 

In Europe, real estate garnering some returns in a global downturn, with domestic investors set to come to the fore

European real estate faces ‘hugely challenging time’ but maintains long-term appeal due to low interest rates. Europe’s property sector is in the midst of a cyclical downturn which is coinciding with long-term structural changes to real estate. However, real estate is seen as one of the few asset classes to generate acceptable returns at a time of low or negative interest rates. Retail and offices will be most affected, due to widespread uncertainty related to rent collections amid the pandemic. 

This has led to investors increasingly assessing the underlying operational risk of the occupiers, and focusing on their own strengths as operators of real estate to keep the income secured.  

Capital flows into the sector are also altering how funds can be deployed. Domestic and European investors are expected to come to the fore in 2021, with inter-continental travel severely limited for North American and Middle Eastern investors. 

While the majority (53%) still expect Asian investment into Europe to increase, this percentage is significantly lower than previous years, with interviewees citing the inability of overseas investors to visit a property in Europe before buying it. Over a third (37%) expect European investors to increase their commitments next year and a small majority expect this to stay stable. However, 51% of respondents expect North American investors to decrease their investments into Europe.

Deal concerns across Europe

Nearly one in four (38%) real estate leaders believe that ‘business interruption’ will get worse over the next 3-5 years. The challenges around business travel and potential future lockdowns are raising concerns about deal sourcing. The industry had been working through a pipeline of deals originated pre-pandemic, subject to conventional due diligence, and mostly with existing partners. Over three-quarters (77% of survey respondents are of the view that there will be a lasting increase in the proportion of time people will work remotely. Assessing new opportunities within restrictions and the difficulty of building up new relationships in a ‘Zoom-era’ might significantly slow down the transaction volume further going forward. 

‘Digital switch’ impacting sector preferences - data centres, logistics, life sciences front-runners with traditional mainstay sectors struggling

The `Digital Switch’, the increased pace of digitalisation around the globe boosted by COVID-19, is having impact on investors’ sector preferences, with logistics, data centres and communications towers and fibre identified as having strong potential. In addition, life sciences and healthcare are coming out favourably, a trend accelerated by COVID-19, as well as residential that is still high on the list of investors (refer to chart 2 in notes to editor).

Life sciences, in particular, has also been cast in a new light by COVID-19, with many developers and investors scrambling to learn about a sector which has traditionally been highly specialised but where strong potential is seen, given long term demographic trends, and the anti-cyclical nature of the sector.

While slightly less prominent than last year, residential remains highly favoured by investors, with three sectors in the top ten representing some form of residential. Respondents did raise concerns around increased regulation.

Given the strong growth of remote work and uncertainty around how this trend may play out over the longer term and what the future role of the workplace will be, no office sectors feature in the top ten this year; even flexible/serviced and co-working has slipped down the rankings as the industry is taking a wait-and-see approach as to how these developments will turn out in a post-pandemic world.

Speaking about the European market, Marie Hunt, Executive Director and Head of Research, CBRE Ireland and ULI Council Member, said: “European real estate is at a turning point, trying to work out its future role in society while facing the cyclical challenges following this year’s pandemic and the ongoing uncertainty this creates.

“COVID-19 has accelerated a number of structural trends that were already in evidence, for example related to digitalisation, remote work and online shopping and forced many to pivot their business models as well as intensify or repurpose their real estate holdings, so it will be interesting to see the longer-term impacts of this. 

“The search for yield, which is now even more dominant than pre-COVID, continues to attract investors to real estate, especially to core and income-generating sectors, such as industrial and residential that continues to appeal to investors, in the ‘safest havens’ across Europe.

Joanne Kelly added: “There's a growing requirement to look more closely at the value that can be derived from the demand shifts, and newer, emerging asset classes. Investors in the sector are therefore looking beyond real estate and into broader real assets - the built environment and infrastructure that surrounds us. These are all inextricably linked, not only to one another, but to how we live, work, consume and spend our leisure time.”

ESG is gaining interest since the pandemic

Following COVID-19, Environmental, Social and Governance strategies have gained far more interest. With many already committed to reducing the environmental impact of the built environment, executives surveyed now see a growing importance for the social aspects of their strategies. 2020 has also seen the real estate world begin to evaluate its wider role in society more seriously – from addressing diversity and inclusion in the workplace to a far greater emphasis on the environmental, social and governance agenda. Although almost eight out of ten (79%) survey respondents are concerned about ESG issues, real estate leaders agree that the industry will play a pivotal role in delivering sustainable places that improve health outcomes for society. 69% of survey respondents said that by far the greatest difference they can make through impact investing is creating sustainable buildings.

Investment in cities believed to offer stability, with Berlin topping the list

The city rankings in this year’s report reflect both the caution and opportunities driving the market, with a focus on cities believed to offer liquidity and stability. Berlin tops the list as the overall favourite for prospects in 2021, with investors encouraged by the relatively strong performance in tackling COVID-19 by Germany as a whole. In second and third spot respectively are London and Paris.(refer to Chart 1 in notes to editor below).

Overall caution on outlook but ‘pent-up’ capital waiting to be deployed

With nine out of ten (90%) real estate executives being concerned about European economic growth for 2021, they are cautious about the overall outlook. Interviews undertaken between July and September resulted in a marked decline in business confidence with 28% seeing a decrease in business confidence compared with 13% in 2019.  

In addition, 44% anticipated a fall in profitability compared with 15% in 2019. Epidemics or pandemics caused 88% of those polled to be `concerned’ or `very concerned’, while 79% were concerned or `very concerned’ about international political stability. 47% believe that liquidity issues will get worse over the next 3-5 years. 46% say returns targeted in 2021 will be lower compared to previous years. 

Reflective of ‘pent-up’ capital raised pre-pandemic, 55% of survey respondents said that they expect to be net buyers of European real estate in 2021, but security of income in non-core assets is causing concern. Half (50%) are concerned about the availability of suitable assets. 

Those surveyed also saw better news in the prospect of central banks’ `lower for longer’ interest rates, seeing reassuring levels of real estate investment activity even during the depths of Europe’s first lockdown, with many citing “pent-up capital” waiting to be deployed.

Respondents are polarised in their views on the future for city living: 37% agreed that there will be a trend away from high urban density while 38% disagreed. 

Notes to editor

About the report

Emerging Trends in Real Estate® Europe is published annually by the Urban Land Institute (ULI) and PwC and is now in its 18th year, ranking 31 European cities for investment and development potential as well as ranking sector prospects. The report is a trends and forecast publication and is a highly regarded and widely read report in the real estate industry. The report provides an outlook on investment and development trends, capital markets, cities, sectors and other real estate issues throughout Europe. Emerging Trends in Europe 2021 reflects the views of 995 individuals who completed surveys, were interviewed or took part in a series of roundtable meetings across Europe as a part of the research for this research. The interviewees and survey participants represent a wide range of industry experts including investors, fund managers, developers, property companies, lenders, brokers and consultants.

Chart 1: European cities overall prospects 2021: Top ten


Overall 2021 ranking City (2020 ranking)
1 Berlin (2)
2 London (4)
3 Paris (1)
4 Frankfurt (3)
5 Amsterdam (6)
6 Hamburg (8)
7 Munich (7)
8 Madrid
9 Milan
10 Vienna

Chart 2: Sector prospects in 2021: Top ten

Overall rank Sector Investment ranking Development ranking
1 Data centres 1 1
2 Logistics facilities 2 2
3 Life sciences 3 3
4 New energy / infrastructure 5 4
5 Industrial / warehouse 6 5
6 Healthcare 7 7
7 Private rented residential 9 8
8 Affordable housing 8 6
9 Communication towers / fibre 4 13
10 Social housing 11 9

About the Urban Land Institute

The Urban Land Institute is a non-profit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land in creating and sustaining thriving communities worldwide. Established in 1936, the institute has over 45,000 members worldwide representing all aspects of land us and development disciplines.

ULI has almost 4,000 members in Europe across 14 National Council country networks. For more information, please visit

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