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DACH and Nordic states are EU’s most attractive destinations, say investors in Q4 pulse survey

Germany, Denmark and France emerge as the EU’s ‘go to’ countries, while Iberian and Benelux nations slide compared to their rivals

DACH and Nordic nations top the list of the most attractive investment destinations in Europe, according to our new survey of perceptions with management consultancy Alvarez & Marsal. Meanwhile countries making up the Iberia and Benelux regions, though still appealing to infrastructure investors, have continued to lose ground relative to Europe’s leaders for private capital.

The US, buoyed by massive fiscal incentive packages, heads the table. But the UK has entered negative territory for the first time, with investors rating its appeal as being now closer to that of some eastern EU countries than larger western ones.  

The biggest two barriers to investment among European countries are unattractive regulatory regimes and political instability, says the six-monthly poll.

Investors also cite a lack of clarity on funding models and an uncompetitive tax regime as obstacles, while barriers to foreign investment are significantly less of a concern.

Jon Philips, CEO of the Global Infrastructure Investor Association said, “It’s vital that member states get on with the job of implementing the legislation that’s been passed by the outgoing European Parliament, which will in turn enable them to attain the EU’s ambitious energy and transport decarbonisation targets.

“Building certainty among investors and addressing barriers to private capital at state level are critical to unlocking access to some €400bn of infrastructure-funds that are available globally.”

Communications and renewable energy are the most appealing sectors to investors, but regulated industries are struggling to attract enthusiasm.

Looking at core infrastructure sectors across Europe as a whole, it is the hardware of communications – including towers, data centres and fibre – that stands out as the most attractive investment area.

Renewable energy such as battery storage and the most well-established forms of sustainable generation – solar, wind and hydro – remain popular. Railways and rolling stock are also felt by investors to be areas of steady performance, with more investments in the sector needed to complete the trans-european transport network.

However Europe’s regulated forms of infrastructure - including gas, electricity and particularly water – are all areas where investor appeal has lessened over the last six months. Airports remain steadily in negative territory compared to other asset types.

ESG considerations continue to have a strong influence over investment decisions, with climate change and cybersecurity seen as being the two biggest issues on investors’ minds.

Read and download the report at the top of this page.