PricewaterhouseCooper and the Urban Land Institute released their Emerging Trends in Real Estate Europe 2012 report last month, with Istanbul topping out the list, followed by Munich, Warsaw, Berlin, and Stockholm.

Real estate professionals in Ireland and Turkey were the most optimistic out of the some 600 surveyed by PwC and ULI, with Irish respondents believing that the worst in their hard-hit country is over, and with developers and investors bullish on Turkey's longterm economic and demographic growth prospects.

Along with Munich and Berlin, the German cities of Hamburg and Frankfurt ranked up seventh and thirteenth on the list, based on the strength of the German economy, which has so far avoided skirted the European debt crisis with its low unemployment and strong exports. Paris and Zurich also made strong showings, though London slid to tenth place from third in the 2011 survey.

Turkey ranked first for development and new investments for the second time in a row in 2012, with its retail prospects being perceived especially strong. The city has not entirely escaped from the European debt crisis, with growth projections for the year being revised downward for the year, although that has not put a stop to projects like Metropol Istanbul, which received planning permission last month to add half a million square meters of new office, retail, and apartment space, including a 300-meter tower, on the Asian side of the Bosphorus.

Athens rounded out the list as the worst place for real estate investment, placing last on all three major measures of investor confidence, with cities in its fellow debt-ridden countries of Portugal, Ireland, Italy faring not much better. Greece's tourism sector was seen as the strongest, with investors focusing on tourist areas rather than the capital.