The INREV Investor Intentions Survey is usually read as a guide to where capital wants to go next. That is useful, but also incomplete. Read differently, the survey works better as a thermometer than a map. It tells us where momentum is building - and, just as importantly, where markets may already be running hot.

Momentum is not the same as opportunity.  When a market benefits from momentum, it means that it is at (say) 08:00 to 09:00 o’clock - still growing, but the best opportunity has passed.

When the survey shows a sector or market that moves sharply up the rankings for the first time after a period of relative neglect, it does not reflect an opportunity.  It just reflects momentum.  In other words,  the majority of investors have accepted that someone has got hold of the opportunity, but there is still some growth to enjoy.

By contrast when a sector or a country has sat at the top of investor preferences for several years, the real opportunity is typically already behind us. Pricing has adjusted, competition has intensified, and incremental capital is no longer being paid for risk. In those cases, popularity should be interpreted cautiously (i.e. the market is at 10.00 o’clock or later).

Residential real estate illustrates this distinction clearly.  It has been Europe’s preferred sector ( amongst the top 2) for several years and remains firmly at the top of the survey.  That persistence should prompt questions rather than comfort. Prime residential yields of around 3.5% sit only marginally above long-dated bond yields of roughly 3%.  The spread is thin, and the duration risk is substantial: some upside, but meaningful downside if rates, regulation, or sentiment move against you.

Political intervention compounds that risk. Housing has become a social and electoral issue across much of Europe, and governments have responded with rent controls, tenant protections, taxation changes and planning restrictions. When something has been the favourite for too long, it is a hotspot.

 Development, by contrast, has moved in the opposite direction. Long avoided due to cost inflation higher rates and some financing constraints, it has climbed rapidly up investor preference rankings. That move suggests momentum rather than overheating. Prime office rents are growing in selected markets, construction costs - while high - have stabilised, and the real estate debt market has returned in force. Financing is available again.

This does not make development a contrarian strategy (the pipeline is not negligeable in some big cities). It means that development is gaining momentum.

The same logic applies when looking at preferred countries. But first, we need to accept that country rankings need to be interpreted relative to market size. Large markets will always sit near the top of investor preferences because they can absorb capital at scale. Their prominence is not a signal of heat; it is a function of depth.

 The UK and Germany are Europe’s largest institutional real estate markets, so should expect them at the top. So should France.

The more interesting signals sit further down the list. Ireland and Denmark stand out precisely because they are not perennial favourites. Both have jumped sharply up investor rankings after years in the second tier. Another momentum signal.

Ireland is a case in point. Prime residential yields are around 4.8% and prime office yields are close to 5%. These look interesting in a European context. These are not distressed levels, but they still allow room for error. Debt is available and capital is returning. A momentum market.

France, by contrast, looks almost dull in the survey. That is precisely why it deserves attention. In relative terms, it appears to be a laggard. Why? High vacancy? Political uncertainty? High government and corporate debt?   Low yields? High development? If you believe all of this, look again and research the market. I am doing it already.

The INREV survey is not what it seems. But it is nonetheless valuable in an unusual way – it shows us where it is hot, where there is momentum and where we should research further.