Real Estate

Commercial

Risk of stronger French industrial rental growth ahead

We expect steady French industrial rental growth over the next few years on the back of a solid economic backdrop and more online shopping. That said, if construction costs and land constraints become more acute, there is a risk that rents climb higher than we currently anticipate.

25 October 2021

Rental recovery gathers momentum

September was another good month for commercial property, with the first year-on-year rental growth recorded since the onset of COVID-19. But as clouds gather over the economic upturn, we suspect that the real estate recovery will also struggle to maintain its current pace. After a rebound in total returns this year, we expect a moderation over the rest of the forecast, as yields stabilise and rental growth is hamstrung by ongoing structural change in retail and offices.

22 October 2021

How pandemic changes will affect US metros

Americans are returning to cities, but the return to the office has been much slower. We see suburban areas being net winners in the residential and retail sectors, although the picture for downtown versus suburban offices is less obvious than the national data currently suggest. What is clear is that the winning metros will tend to be cheaper, and in mostly southern states. These will attract newly footloose workers, which will directly support the residential markets in those metros and will also have a positive effect on demand for office, retail, leisure and industrial space. In view of the wider interest, we are also sending this US Commercial Property Focus to clients of our US Housing service

22 October 2021
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Online risks to retail may not be as bad as once feared

By any standard, retail property has had a torrid time during the pandemic. The latest data on online sales look like further bad news, with the share of spending much higher than expected after lockdowns. But the recovery in consumer demand has also been stronger and is likely to offset any negative consequences.

21 October 2021

Warsaw retail rents to recover but not surge

After a fall this year, we expect Warsaw retail rents to return to growth in 2022. That said, the city’s reliance on office workers means that the shift to remote working will weigh on retail spending and keep a lid on rental growth.

Near-term upgrades to German office rental growth

Prime office rental growth in Germany is on track to be stronger than forecast in the near term. However, we think rental growth will slow in the coming years as the supply of modern space is expected to continue to outpace demand, even accounting for a shift in occupier preferences towards prime space.

Downtown offices not losing out everywhere

National office data suggest that suburban office markets have significantly outperformed downtown offices since the onset of the pandemic. But metro-level data point to a more nuanced picture in which metros reliant on commuting have seen downtown areas hit hardest, but those with a decent share of reverse commuters have seen a more balanced picture. The next 12 months will help to determine whether this is a temporary or longer-term factor.

Commercial Property Lending (Sep.)

Outstanding real estate debt increased for the fourth consecutive month in September, thanks to net lending turning a corner in the residential sector and accelerating in the commercial sector.

15 October 2021
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