TL;DR
- London heads the report's European city ranking, ahead of Madrid and Paris, with Munich fourth, Milan fifth, Amsterdam sixth and Berlin seventh (PwC). BE News and PAP describe it as a ranking of investment and development prospects (BE News, wnp.pl/PAP).
- According to BE News and PAP, 45% of survey respondents expect business profitability to rise in 2027, against 50% a year earlier, a slight softening in the release's words (BE News, wnp.pl/PAP, ULI).
- According to Property Week, construction costs (58%) and interest-rate moves (55%) are the most-cited real estate and business-environment concerns (Property Week). The city ranking comes from a survey and interviews, so it shows respondents' views, not completed transactions.
Is London still Europe's favourite?
On paper, yes. The latest Emerging Trends in Real Estate Europe report, produced by PwC & the Urban Land Institute (ULI), puts London first in its European city ranking, with Madrid and Paris close behind (PwC). BE News describes it as a ranking of investment and development prospects (BE News). Property Week adds that London has topped the table since 2022 (Property Week).
The rest of the table is moving. Munich rose to fourth and overtook Berlin to become Germany's highest-ranked city for the first time, while Milan climbed to fifth, from seventh a year earlier. Amsterdam is sixth and Berlin seventh (PwC). Bisnow notes that Lisbon entered the top 10 and Dublin dropped one place to 14th. It adds that the report points to growing interest in Warsaw (Bisnow).
| Rank | City |
|---|---|
| 1 | London |
| 2 | Madrid |
| 3 | Paris |
| 4 | Munich |
| 5 | Milan |
| 6 | Amsterdam |
| 7 | Berlin |
The top seven as listed on the PwC report page.
Why is the mood cooler than the ranking?
Because the same people who put London first are less sure that profits will follow. Expectations for business profitability softened slightly: 45% of respondents expect an increase in 2027, down from 50% in last year's report, according to BE News and PAP (BE News, wnp.pl/PAP, Property Week, Bisnow, ULI). The report expects recovery and growth to stay uneven and to take longer than previously thought, at portfolio and national level (BE News).
Share of respondents expecting business profitability to rise
That is the slight softening the release describes.
The report's headwinds include (BE News):
- higher bond yields and inflation;
- questions about real estate's appeal compared with other asset classes;
- rising energy and construction costs;
- international political instability and rising social unrest;
- "higher-for-longer" interest rates, meaning borrowing costs that stay high for an extended period.
Bisnow reads the shift as investors turning from a broad market recovery to resilient income, operational improvements and individual assets with strong fundamentals (Bisnow).
What worries respondents?
According to Property Week, construction costs and resource availability were the most cited real estate issue for 2027, at 58%, and interest-rate moves topped the business-environment list, at 55% (Property Week). Housing affordability is a top-three concern for 34% of respondents, Bisnow reports (Bisnow).
Most-cited concerns for 2027
The two figures come from different lists, so they are not shares of one question.
Is there any good news in the survey?
PwC's EMEA real estate leader, Jean-Baptiste Deschryver, calls the outlook "more nuanced than a simple narrative of a stalled recovery". He points to resilient occupier demand and to family offices and other private capital offsetting the caution of core institutional investors (BE News). Core investors are the large, low-risk buyers such as pension funds and insurers.
Simon Durkin, CEO of ULI Europe, says the survey shows the industry's "great capacity to adapt" to continued uncertainty (BE News). On sectors, Bisnow reports that data centres rank first for investment prospects, followed by new energy infrastructure (Bisnow).
How much weight should a sentiment ranking carry?
Some, but not too much. According to Property Week and Bisnow, the report rests on a survey and interviews with 1,498 senior property professionals across Europe (Property Week, Bisnow). The city ranking records what respondents expect and prefer. It is not built from deal, price or capital-flow data.
That makes it a good gauge of where the industry wants to be, and a weaker guide to where money will actually move.
Why it matters
Our view: London's first place says investors still want depth and liquidity, but the survey gives little reason to expect a quick cash-flow lift. The ranking held while the share expecting higher profits slipped from 50% to 45% (Property Week), and, according to Property Week, construction costs (58%) and interest rates (55%) are the most-cited real estate and business concerns (Property Week).
Two scenarios, neither a forecast. If borrowing and building costs stay high, then London's lead would be a sign of safety rather than of strong returns, and income-focused assets would keep the advantage. If costs ease and the 45% grows, then climbers like Munich and Milan (BE News) could close the gap on the leaders.
FAQ
What is Emerging Trends in Real Estate Europe?
It is an annual report by PwC & the Urban Land Institute, based on a survey and interviews with property professionals (Property Week). This year's edition is the 2027 report, published on 10 November.
Does the ranking show where deals are being done?
Not directly. The ranking comes from a survey and interviews (ULI), so it shows the prospects respondents see, not completed transactions.
Who follows London, Madrid and Paris?
Munich is fourth, Milan fifth, Amsterdam sixth and Berlin seventh (PwC).
When you weigh London against Madrid or Munich this year, do you trust the survey's mood or the deal data more?
