LONDON, March 13 (Reuters) - Germany surpassed Britain as the most attractive European property market in 2013 as fading fears of a euro zone break-up encourage investors to venture back into the bloc, a report showed on Wednesday.
A survey by property consultant CBRE Group of 362 investors, including some of the world’s largest fund managers, found that 35 percent picked Germany as the most appealing market, compared with 24 percent that chose Britain.
“While recession is a key concern, investors’ fears of a euro break-up have subsided, and the overall impact of the euro zone crisis on investment activity appears to have eased,” CBRE’s head of European research, Peter Damesick, said.
The survey included a greater share of German investors than it did the year before.
London, whose position outside the European Union has made it a target for overseas investors seeking safe havens in recent years, retained its spot as the most favoured city, however, ahead of Munich and Berlin with 31 percent of votes.
Dublin and Madrid were also among the top 10 favoured cities, coming at sixth and ninth place, respectively, indicating growing confidence in the recovery of the Irish and Spanish economies and real estate markets, CBRE said.
“The next 12 months could mark the beginning of a reversal of the strong polarisation that has characterised European property investment market over the past two years,” Damesick said.
Sovereign wealth and pension funds have ploughed billions of pounds into property in upscale areas of London and Paris in recent years, pushing prices for certain assets up even as prices of poorer quality properties fell.
Market fears of a euro zone break-up have eased after strong action from the European Central Bank last year. Just 9 percent of respondents said a break-up was the greatest threat to recovery, down from 24 percent in 2012. Almost half said recession was their biggest concern.
Activity in Europe’s property market could also get a boost from an increase in the number of properties available to buy, which has been cited by investors as an issue, a separate survey showed.
Property adviser DTZ said it expected 21 billion euros ($27.3 billion) of commercial property to come to the market by 2017 as German open-ended funds liquidate. Forced sales are likely to reach record levels in 2014-2017, increasing available assets particularly in Germany and Netherlands, it said.
By type of property, the CBRE survey found that logistics leapfrogged shopping centres to become the second most popular sector, favoured by 20 percent of respondents compared with 14 percent in 2011. Offices were the most popular at 29 percent, marginally higher on the year.
Investors such as private equity giant Blackstone Group have been buying warehouses and logistics facilities across Europe, encouraged by the higher yields and by the growth of online shopping which has spurred demand for such sites at the expense of bricks-and-mortar stores.