Germany overtook the U.K. as the most-favored investment location in Europe for unlisted real estate funds as the recovery of its economy, the continent’s largest, made offices and retail properties more attractive.

The U.K. fell to fourth place behind Germany, France and the Nordic region, according to an annual report by the European Association for Investors in Non-Listed Real Estate Vehicles. Inrev, as the association is known, surveyed investors and fund managers overseeing 981 billion euros ($1.3 trillion) of assets.

“This is a dramatic change in sentiment,” said Lonneke Loewik, the head of research at Amsterdam-based Inrev, in a statement today. “Investors seem wary of higher property prices and a slower economic recovery in the U.K., but attracted by growing confidence in the German and other European markets.”

Germany’s economy grew a record 3.6 percent last year as a surge in exports to Asia prompted companies to increase investment and hire more people, giving consumers more confidence to shop. Retail real estate in Germany was the most favored type of property among investors, while office buildings were the third most popular, the survey showed. 

Source: Bloomberg