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Optimism has returned to Europe's real estate industry. Sentiment among industry leaders about the prospects for their businesses is more positive than at any time since 2008, despite the uncertain macroeconomic outlook. Equity for investment in prime commercial real estate is expected to increase, but bank debt is predicted to contract further.

Debt is expected to be available primarily to those who don't need it. This will however create opportunities for those with access to finance as distressed assets are brought to market. The new sources of equity and debt that are emerging will be insufficient to fill the refinancing gap and, in any event, will be focused on prime or low-risk assets. Debt is expected to be available primarily to those who don't need it. This will, however, create opportunities for those with access to finance as distressed assets are brought to market.

Capital is increasingly global in nature, flowing into European property from across the world to the larger, well-capitalized or well-established businesses. At the same time, decisions about the way that capital is deployed will become increasingly granular, as investors shut out of the core markets chase yields worth working for.

Accepting more risk requires more rigor and this is where those who are specialized, who have detailed local knowledge, and who can create networks in regional markets will prosper. Investors are exploring off-the-radar locations, learning how the local economies of those areas function, and seeking relationships with local operators to help them do that. Lenders are similarly specializing. Pan-European strategies are out of favor. Now it is about depth and detail, as banks become more local themselves, seeking security in knowing how the demographics or economy of an area works.

Investors and lenders, as they keep one eye on refinancing risk, want to know whether an asset will stand the test of time. The need for flexibility and future-proofing buildings will see the green agenda take a significant step forward in 2013. However it's not just sustainability that is changing the nature of what is built, and where. Across all sectors, macro trends are emerging that provide opportunities for those able to grasp them.

For those hunting distressed-property loan portfolio deals, there will be more interesting prospects over the months ahead. Dublin will attract more private equity capital as banks in Ireland release more assets this year. Investors will also be watching to see how Spain's "bad bank" organizes itself. And European banks will be dealing in the small stuff as well as the big portfolios, creating opportunities for more businesses in 2013.But as with all else this year, nothing is going to come easy. Europe's real estate industry is more confident about its revival, but recovery is still some way off.

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