Dublin in Europe’s Top Ten most active real estate markets - ULI and PwC 2023 Emerging Trends in Real Estate Europe

10 November, 2022

  • London, Paris and Madrid top cities in Europe for overall real estate investment and development.

  • Real estate industry expects tough year ahead with reduced finance, declining values and looming recession. 

  • 71% of real estate leaders believe Europe will move into recession before the end of 2022 according to new data from the ULI and PwC.

  • A fall in values is inevitable, according to survey respondents, with pricing between prime and secondary real estate expected to widen.

  • Expectations around the availability of equity and debt sink to their lowest level since the global financial crisis.

Real estate business confidence and expectations of profitability have dropped to a low level, reflecting widespread industry concerns across an array of indicators for the business, political and real estate environments.

Emerging Trends in Real Estate® Europe 2023 is the 20th annual survey by the Urban Land Institute (ULI) and PwC of European real estate sector leaders’ expectations for the year ahead.

Dublin - capital inflows of €6bn

Dublin is one of Europe’s Top Ten most active real estate markets, with capital inflows of €6bn, up from €5bn last year. Dublin also ranks in the top half of the 30 European cities ranked for investment and development prospects, holding its position at 13th, similar to last year.    

Joanne Kelly, Leader, PwC Ireland Real Estate Practice, said: “Despite economic uncertainties, Dublin continues to show attractive real estate investment and development potential. As the only English speaking territory in Europe having a supportive business environment and with added demand post Brexit, we continue to see interest in Dublin as a location offering value and competitive returns for real estate investment.” 


Based on the views of over one thousand real estate leaders from across Europe, the report found 91% concerned about inflation, closely followed by interest rate movements (89%) and European economic growth (88%). Political uncertainty at the global, regional and national levels are of high concern as well. 

Looking to the medium term, in five years’ time, only 13% see inflation being a problem, while interest rates (73%) and growth (76%) remain medium term concerns. From a real estate business perspective, construction costs and availability of resources top the list, with 92% concerned about costs and 84% about resources in 2023. These issues are expected to remain for the longer term with 76% and 73% seeing respective cost and resource problems for the next three to five years.

On the back of this uncertainty, 71% of real estate leaders believed Europe would move into recession before the end of 2022, negatively affecting development activity, availability of finance and investment volumes followed by occupancy, rents and values.

Germany, the UK and the Netherlands look unlikely to escape recession, while France seems more insulated, largely due to how it sources energy. Recession is likely before 2023 for 83% of respondents in Germany, 82% in the UK, 79% in the Netherlands and 68% in Spain. French (45%) respondents are more sanguine.

Confidence in the availability of debt and equity has not been this low since 2012 and 2009 respectively. Respondents believe capital coming into Europe from every part of the world is more likely to decrease than increase. Respondents are most negative about the prospects for debt (70% expect decrease) and equity (63% expect decrease) for development and debt for refinancing or new investment (64% expect decrease).

Interviewee responses point to values dropping in 2023. The coming year could be a great buying opportunity for core and all-equity investors that are still under-allocated to real estate. The consensus is that distress is unlikely to reach anything like the proportions of the global financial crisis, but the rise in interest rates will nonetheless create stress, for example related to the need to repair banking covenant breaches if values decline, significantly higher refinancing costs and the potential requirement to sell assets in response to redemption requests for listed open-end funds.

From the development perspective, interviews indicate that projects slated for 2023 might be pushed back into 2024 or shelved entirely. This lack of new development is seen by some as a positive for existing assets and their owners. 

City rankings

With economic uncertainty afflicting the whole of Europe, overall investment and development prospects for most of the 30 cities covered by Emerging Trends Europe have deteriorated since last year’s report. For the second successive year, London remains the most favoured city in Europe for its overall prospects. Paris comes in second place, up from third position last year, with the capital’s strong transport links, but industry leaders are also anticipating a boost from the 2024 Olympic Games. Berlin has slipped one place down the rankings this year, to third position, and like most German cities, has registered one of the larger reductions in scores across Europe — no doubt reflecting the country’s dependency on Russian gas supplies and the potential impact on inflation and the wider economy. The other cities making up the top ten are: Madrid, Munich, Amsterdam, Frankfurt, Hamburg, Barcelona and Milan. 

Kevin Nowlan, Chair, ULI Ireland, said: “The market has shifted rapidly over the last few months with the outlook becoming more negative. Since we conducted the survey and interviews over the summer, which already showed highlighted deep concerns, the industry has become even more worried. But there is still a lot of capital available to invest and mostly not in a hurry, waiting for the right opportunities to arise. For the industry to weather the storm, stock selection is key, in addition to a strong ESG focus, operational skillset and customer focus.”

Joanne Kelly concluded: “New energy infrastructure tops the 2023 sector rankings for the second year, reflecting historically high energy prices and a longer-term trend in which investors rebalance holdings towards alternative assets. The life sciences sector comes second and data centres are third. 

“Various forms of housing dominate the top 10 sector rankings, varying from retirement/senior living to social and affordable housing. Across Europe, there is also more concern about housing, with the lack of supply increasing political uncertainty around policy.”

Notes to editors

Top Ten City rankings for investment and development prospects (see page 44 of report): 

  1. London

  2. Paris

  3. Berlin

  4. Madrid

  5. Munich

  6. Amsterdam

  7. Frankfurt

  8. Hamburg

  9. Barcelona

  10. Milan

Top Ten Sector Prospects:

  1. New energy infrastructure

  2. Life sciences

  3. Data centres

  4. Social housing

  5. Retirement/assisted living

  6. Affordable housing

  7. Self-storage facilities

  8. Logistics

  9. Co-living

  10. Private rented residential

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 shape the future of the built environment for transformative impact in communities worldwide. Established in 1936, the institute has over 46,000 members worldwide representing all aspects of land use and development disciplines.

  • ULI’s mission priorities that the organisation will be focusing on over the next three years include:

    • decarbonising the real estate sector and targeting net zero;

    • educating the next generation of diverse real estate leaders; and, 

    • increasing housing attainability in communities around the world.

  • ULI has almost 5,000 members in Europe across 15 National Council country networks. For more information, please visit europe.uli.org, or follow us on TwitterLinkedIn or Instagram.

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