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Emerging Trends in Real Estate® 2021

An uncertain impact

Europe’s property sector is in a cyclical downturn which coincides with long-term structural changes for real estate. The retail and office sectors will be most affected, due to widespread uncertainty related to rental income during the pandemic.

Real estate remains attractive in challenging times with a shift to new sectors driven by the pandemic 

Europe’s property sector is in a cyclical downturn which coincides with long-term structural changes for real estate, according to the latest 18th edition of the Emerging Trends in Real Estate® Europe 2021 report, a survey of almost 1,000 industry leaders across Europe carried out by PwC and the Urban Land Institute (ULI). The retail and office sectors will be most affected, due to widespread uncertainty related to rental income during the pandemic. Real estate executives were cautious about the overall outlook, with 90% saying they’re concerned about European economic growth in 2021 and 81% concerned about business interruption. 

In addition, 44% anticipate a fall in profitability compared with 15% in 2019. The pipeline of pre-COVID-19 deals is mostly complete, and the sector is characterised by caution about deal and capital sourcing due to travel restrictions and (partial) lockdowns. On the positive side, the strength of demand for real estate as an asset class and ‘safe haven’ is such that more than half of survey respondents expect to be net buyers of real estate in 2021.

Brussels: stable position

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. However, there is a consensus that this is not a good crisis for the mega-cities in which life is expensive, complicated and involves long, crowded commutes. Dynamic cities of manageable dimensions which are attractive for start-ups and young people, with lower rental prices than the mega-cities remain attractive investment destinations. 

Brussels is ranked 12th in overall investor attractiveness among 31 European cities, compared to 13th last year and 21st the year before. In recent years the city has benefited from the wider European investment trend for more operational sectors such as residential and hotels, and has even improved its position in the current crisis. “Brussels has a great deal to offer, more than just reasonable prices,” states Grégory Jurion, Partner and Real Estate leader at PwC Belgium.

“Our 2020 Workplace Preference survey identified Brussels as the most popular working location for young Belgians between the ages of 19 - 28. In 2019 our European Start-up survey revealed that 90% of Brussels-based start-ups rate their city as a great place to do business, ahead of innovation centres like Berlin and Paris. In addition, Brussels offers the right mix of assets, and a regulatory environment that promotes transparency and legal certainty, and which offers appropriate investment vehicles for investors from abroad. And there is a collective will among all stakeholders to put mobility - public transport, shared vehicles, mobility as a service - at the top of the agenda. Combined with the quality of life and demand for residential property, these factors keep Brussels in a strong position.”

Grégory Jurion, Partner and Real Estate leader at PwC Belgium

A shifting landscape

The pandemic has amplified a number of previously identified structural trends, such as the uptick in e-commerce and remote working. Office and retail property are considered the types of buildings most likely to be repurposed (51% and 37% respectively). The increased pace of digitalisation around the globe (boosted by COVID-19) is also having impact on investors’ sector preferences, with logistics, data centres and communications towers and fibre identified as having strong potential. Life sciences 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.

Residential remains highly favoured by investors, with three sectors in the top ten representing some form of residential real estate. 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 real estate 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.

Top ten sectors in 2021

Overall rank sector Overall tank sector
1 Data centres 6 Healthcare
3 Logistics facilities 7 Private rented residential
4 Life sciences 8 Affordable housing
4 New energy / infrastructure 9 Communication towers / fibre
5 Industrial / warehouse 10 Social housing


“The uncertainty this year has shifted the priorities of the sector”, explains Xavier Denis, Chair of ULI in Belgium. “On the one hand, we have seen a move away from the mainstream sectors of retail, hotel and leisure, as well as a slowdown of new transactions in office. On the other hand, we have witnessed a strengthened demand for housing or other alternative sectors such as data centers, life sciences, healthcare, energy and communication infrastructure, as well as a continued appeal of industrial properties and logistics. There is a growing requirement to look more closely at the value that can be derived from these demand shifts in the way we live, work and consume. Investors should also be looking beyond real estate to more operational aspects. We are living in very interesting times!”

Xavier Denis, Chair of ULI in Belgium

“European real estate is at a turning point, trying to work out its future role in society while facing the cyclical challenges following the outbreak of the pandemic earlier this year and the ongoing uncertainty this creates. 2020 has also seen the real estate world begin to evaluate its wider role in society more seriously,” comments Geoffroy Jonckheere, Partner in PwC Belgium’s Real Estate practice. “This goes from addressing diversity and inclusion in the workplace to a far greater emphasis on the environmental, social and governance agenda. The social upheaval brought about by COVID-19 has the potential to accelerate the growth and prominence of ESG investing in the built environment, with social impact increasingly being considered as part of an overall strategy rather than a specific investment strategy via specialist funds or products. There’s a clear will to advance and formalise ESG aspects and drive their maturity, although there’s still a long way to go.”

Geoffroy Jonckheere, Partner in PwC Belgium’s Real Estate practice

Capital looking for (socially responsible) opportunities

In this time of significant uncertainty investors continue to see Europe's core cities as safer bets and there remains cautious optimism. Central banks' decisions to depress interest rates for the foreseeable future may see an uptick in investment activity as pent up capital is deployed by investment fund managers under pressure to invest, but 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. 

However, the assessment of new opportunities within restrictions (the inability of overseas investors to visit a property in Europe before buying it) and the difficulty of building up new relationships in a ‘Zoom era’ might significantly slow down the transaction volume further going forward. At the same time, this could give an advantage to those players with a greater footprint with local resources in place on the ground. The investment environment is different from country to country in Europe; this heterogeneity gives the advantage to local players in terms of spotting and understanding opportunities, and domestic investors are expected to come to the fore in 2021.

Following COVID-19, Environmental, Social and Governance (ESG) strategies have gained far more interest. 78% of respondents think that energy efficiency, carbon emissions and climate adaptation will increase in importance in their portfolios in 2021. Some within the sector are turning their attention to what can be done to make retail and office assets more sustainable when they are repurposed. 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.

About Emerging Trends in Real Estate Europe 2021

Emerging Trends in Real Estate® Europe (ETRE) is a trends and forecast publication now in its 18th edition. Undertaken jointly by PwC and the Urban Land Institute, the report provides an outlook on investment and development trends, capital markets, cities, sectors and other real estate issues throughout Europe (see chart below). The report reflects the views of 995 individuals across 25 European countries, representing a wide range of industry experts, including investors, fund managers, developers, property companies, lenders, brokers and consultants. Interviews were conducted from July - September 2020.

About ULI 

ULI, the Urban Land Institute, is a nonprofit research and education organisation supported by its members. Founded in 1936, we now have over 40,000 members worldwide, representing the entire spectrum of land use and real estate development disciplines working in private enterprise and public service. A multidisciplinary real estate forum, ULI facilitates an open exchange of ideas, information, and experience among industry leaders and policy makers dedicated to creating better places. 

Members say we provide information they can trust, and that ULI is a place where leaders come to grow professionally and personally through sharing, mentoring, and problem solving. With pride, ULI members commit to the best in land use policy and practice. 

ULI has been active in Europe since the early 1990s and today we have over 3,000 members. We have a particularly strong presence in the major European real estate markets of the UK, Germany, France and the Netherlands but are also active in emerging markets such as Turkey and Poland. For more information, please visit


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Contact us

Grégory Jurion

Grégory Jurion

Partner, PwC Belgium

Tel: +32 476 42 39 16

Geoffroy Jonckheere

Geoffroy Jonckheere

Partner, PwC Belgium

Tel: +32 475 91 08 29

Connect with PwC Belgium