Skyline Berlin_2

Survey: Real estate investment climate

19 August 2020

Survey of investors: Coronavirus crisis causing significant changes in investment strategies

• Decreasing appetite for risk
• Greater focus on climate-friendly investment and core properties
• Logistics and health care the most in-demand asset classes
• Germany an anchor of stability in investment climate index

The coronavirus crisis has led to a significant shift in the investment strategies of institutional real estate investors. “Lower risk, lower return” is the mantra of the moment. 58 per cent of the 150 professional investors in Germany, France and the UK surveyed by Union Investment for its investment climate study are currently pursuing such a strategy. The figure was just 35 per cent prior to the outbreak of the pandemic. The shift is especially pronounced in the UK, where security is the main investment motive for 79 per cent of those surveyed. Before the pandemic, it was 50 per cent. Nonetheless, there is no general reluctance to invest. Only five per cent of the European investors in the survey intend to avoid all investment in real estate in the current phase.

Investment Climate Survey


The coronavirus pandemic has also triggered a significant shift towards climate-friendly investment by institutional investors, with 54 per cent of respondents planning to invest more in this segment. 49 per cent are aiming to acquire more core properties as a result of the virus, while 42 per cent indicate that they will be investing more in their own country. This change in emphasis is particularly strong in France: 71 per cent of French investors are planning climate-friendly investment, 65 per cent intend to buy core properties and 59 per cent are choosing to invest increasingly in their domestic country.

The UK, in contrast, has seen a less marked change in investment focus due to the coronavirus pandemic. The study found that only 31 per cent of respondents intend to focus more on climate friendliness, 36 per cent on core real estate and a mere 14 per cent plan more investment in their own country. However, 43 per cent of UK investors intend to invest more heavily in other property types. Overall, 41 per cent of the institutional investors covered by the survey plan to do likewise.

Investment Climate Survey

Seeking stabilisers in the crisis

Health care and logistics are the most favoured asset classes among European investors in the current market phase. 65 per cent of respondents expect that more capital will be channelled into these categories. “Both these property types are less prone to crises and help to stabilise cash flow in a portfolio,” said Olaf Janßen, head of Real Estate Research at Union Investment. Having said that, the residential asset class also remains attractive: 55 per cent of survey participants anticipate rising inflows into this Segment.

Investment Climate Survey

The majority of European real estate investors (57 per cent) expect the German property market to recover fastest from the coronavirus pandemic. The Berlin and Frankfurt markets in particular are rated highly by respondents: 42 per cent believe the German capital will make a rapid recovery, while 38 per cent cited Frankfurt. The real estate markets in Paris (30 per cent of respondents), London (29 per cent) and Stockholm (23 per cent) are also considered to have good chances of recovery. The study indicates that the markets in Milan (55 per cent of respondents), Madrid (47 per cent) and Barcelona (33 per cent) are likely to struggle with the consequences of the pandemic for longer. 

Olaf Janßen

“Germany benefits from its economic strength and the government’s successful crisis management to date. Berlin and Frankfurt, like other German locations, have a modest pipeline of new office space, giving them a good chance of getting back to normal faster.”

Olaf Janßen, Head of Real Estate Research at Union Investment

Investment climate index: France and UK with deep declines

Germany is the anchor of stability in the current real estate investment climate index. Compared to the last survey six months ago, the indicator for Germany has fallen only slightly from 63.2 to 62.6 points. The situation is significantly different in France (down 9.5 points) and the UK (down 6.1 points). In both countries, this is due to a change in location factors and expectations. In France, the location factors sub-index declined by 13.1 points to 57.5 points, while the expectations sub-index fell by 20 points to 37.6 points. A similar picture can also be seen in the UK.

Investment Climate Survey

About the Union Investment survey

Union Investment launched its Investment Climate Index of European property investors in 2005, with the survey taking place at six-month intervals since spring 2008. The index is based on four indicators: market structure, the general environment, location factors, and expectations, each with a weighting of 25 per cent. For the index, market research institute Ipsos conducted interviews between May and July 2020 with 150 property companies and institutional real estate investors in Germany (n=57), France (n=51) and the UK (n=42).

If you have any questions regarding this survey, please contact:

Astrid Lipsky


Astrid Lipsky

Manager, Marketing/ Communications

Union Investment Real Estate GmbH

+ 49 40 34919 4923