Real estate investment plays a vital role in facilitating European business and industry. The provision of appropriate premises is equal in importance to plant and machinery as a vital factor of production, as well as an important requirement for a healthy and pleasant working environment in the services sector. While owner occupation remains the preferred option for a significant minority of business occupiers, the majority of European commercial real estate is held by third party investors. Their preference for leased space and associated services enables greater flexibility and agility for European business. Moreover, the ability to lease rather than own real estate enables many businesses to release capital for investment in expansion, productivity gains and R&D. The use of capital for investment rather than consumption results in a multiplier effect for economic value creation for both real estate investors and business occupiers.
The regeneration of the built environment enables sustainable economic growth. It can entice businesses to relocate (accessibility, appropriate business space, services) and rejuvenates civic centres through the provision of retail, leisure, education and health facilities. Private and publicly listed property companies spear-heading urban regeneration partnerships do so with capital (debt and/or equity) support from institutional investors. Moreover, investment in property provides an attractive and consistent income stream.