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Lower risk free rates and a relatively strong economy mean that prime property yields in Germany are set to fall even further in the wake of Brexit. While other markets will also see lower property yields, country-specific risks will lead to a growing …
18th July 2016
As in core Europe, bond yields in the CEE region have fallen indiscriminately in the aftermath of the Brexit vote. This will mean that, whilst economic growth will be a touch weaker, in the long-run prime property yields for much of the region are likely …
15th July 2016
Office rental growth in Italy is set to be negatively affected by a slowdown in the Italian economy, including weaker employment growth. And coupled with political uncertainty, the office market looks increasingly susceptible to a deterioration in …
13th July 2016
After a solid start to the year, Nordic transaction volumes now need only to equal those from the same period last year to set a new annual record. With concerns over UK pricing in the wake of the Brexit vote likely to drive additional capital to the …
7th July 2016
Economic uncertainty and lower business and consumer confidence resulting from Brexit are likely to weigh on German GDP growth over the coming 18 months, leading to slower industrial rental growth. Nonetheless, we think investor demand will remain strong, …
6th July 2016
The commercial construction PMI fell to its lowest level since mid-2009 in June. This highlights the extent to which the uncertainty around the EU referendum was weighing on developers’ activity. The result of the referendum would have done little to …
4th July 2016
The UK’s vote to leave the EU has increased the risk of financial sector jobs moving from London to cities such as Dublin, Frankfurt or Paris. Given existing vacancy levels and near-term pipelines, only Paris has the scope to absorb a significant increase …
1st July 2016
We do not see the UK’s vote to leave the EU as having a major effect on the CEE economies and property markets. Indeed, with Hungary likely to be buoyed by a second ratings upgrade later this year, we believe that Budapest office capital values could rise …
29th June 2016
The UK’s decision to leave the EU is unlikely to cause a significant decline in aggregate investment activity in continental Europe. However, it could boost investor demand for commercial property in core European cities, at the expense of periphery …
24th June 2016
Prime retail rents in Athens moved sharply higher in the first quarter. However, a weak economic environment will limit further upside, while also keeping industrial and office rents in check. … Rise in Athens retail rents doesn’t signal a wider market …
23rd June 2016
Decent economic growth in the Netherlands in the next few years will support office occupier demand. Coupled with low availability for modern space this means that, rather than acting as a brake on rental growth, new completions in the Zuidas (CBD) …
22nd June 2016
Prime retail rents in Bucharest have, so far, failed to benefit from the surge in retail sales. But with a robust economic outlook and international retailers increasingly attracted to city, we expect rents to pick up in the second half of the year. … …
20th June 2016
Copenhagen industrial yields have lagged behind the falls seen in the other sectors, as well as those seen for industrial assets in other cities. However, with the occupier market outlook now much improved, in the next three years we believe Copenhagen …
17th June 2016
Spain’s recovery has underpinned rising office rents in Barcelona and Madrid. But with the economy losing steam, we expect weaker employment growth to moderate the pace of office rental growth. … Slower employment gains to weigh on Spanish office rental …
15th June 2016
Retail rents in Milan and Rome rose sharply last year. But a slowdown in the Italian economy and consumer spending growth over the coming years will mean that rental growth now eases back. … Retail rental growth to cool in …
10th June 2016
Even with already low commercial property yields, the low interest rate environment means that commercial property will remain attractive for investors. We expect further yield declines to drive capital values higher over the next couple of years, albeit …
7th June 2016
In the absence of particularly enticing prospects for alternative asset classes, demand for prime commercial property will be strong for at least the next two to three years. This has meant that we have again lowered our yield forecasts for the 2016-18 …
Office values in Germany’s four main cities have risen sharply in recent years. But a strong occupier market suggests that valuations aren’t excessively stretched. Furthermore, with a positive outlook, we think there is scope for capital values to move …
26th May 2016
The decline in prime Dublin office yields towards pre-crisis levels raises the question of whether they have again fallen too far? But with a positive rental growth outlook and risk-free rates at record lows, it is far from clear that Dublin offices are …
24th May 2016
The start to the year has seen a slight easing of economic growth in much of the region, in part due to a rise in uncertainty. This caused investment activity to fall back significantly and rental value growth to be limited to a handful of markets in all …
20th May 2016
With all-property rental values rising by a little under 0.5% q/q in Q1, it was further yield compression that once again drove capital value growth. But with yields declining by just 5bps, capital values rose by just 1.6% q/q – the slowest rate since …
Property yields ticked down marginally in Q1, but are now 80bps below their 10-year average. Changes in alternative asset pricing – with bond yields falling and dividend yields rising – mean that prime property is no longer undervalued, particularly in …
16th May 2016
Lacklustre economic growth this year and next due to the strength of the Swiss franc is likely to drag Swiss office rents down further. But with negative bond yields and interest rates, this is unlikely to prevent yields from edging a little lower. … …
12th May 2016
Norwegian manufacturing sector activity has slowed due to the drop in the oil price, whereas in Denmark and Sweden, output continues to grow steadily. Across the 2016-19 period, this will support solid rental growth rates in Denmark (2.1% p.a.) and Sweden …
6th May 2016
Investment activity across Europe declined in Q1. However, we don’t think that this is a sign of things to come this year. Indeed, investor sentiment remains upbeat, while strong capital flows are likely to put upward pressure on capital values. … …
3rd May 2016
A solid debt market and a high volume of capital chasing commercial property will keep bidding on prime assets competitive. Coupled with improving prospects for rental growth, we believe that this will drive prime European yields 15bps-20bps lower in the …
29th April 2016
German consumption growth is set to moderate this year and next. However, due to demographic factors, prospects for retail sales in the main cities seem stronger than for Germany as a whole. Combined with the importance of well-located stores for …
28th April 2016
Solid employment growth will support strong occupier demand for Warsaw offices. But , the city’s huge development pipeline will again push rents lower in both 2016 and 2017. As such, we expect prime office rental values to decline by 5.4% in total across …
27th April 2016
The falls in Moscow office and industrial rents since 2014 have been largely in line with our expectations. But despite large falls in real wages, retail rents have fallen by much less than we anticipated. Given that economic weakness in Russia is set to …
21st April 2016
A softening in the retail sector has negatively impacted the wider retail market in Belgium. However, new entrants from abroad remain keen on the prime high streets and shopping centres in major cities. That will support rental growth of around 2%-2.5% …
20th April 2016
Last year, office take-up in Milan hit a new record and the vacancy rate fell for the first time since 2008. Although both factors imply the recovery in office rents may be about to gather momentum, there are a number of reasons why rental growth is more …
18th April 2016
The Grand Paris Express project will reduce travel times between Paris’ major hubs and will support urban renewal in a number of regeneration areas around the city, including new office hubs. By itself, we do not see this as a major risk to prime CBD …
15th April 2016
In 2015, German logistics take-up hit a new record. Although the Kiel Institute’s logistics sentiment indicator fell to its lowest level in three years in Q1, consumer goods companies and delivery companies reported solid results, suggesting that occupier …
14th April 2016
It is most likely that the UK will vote to stay in the EU. However, in the event of a ‘leave’ vote, it is not necessarily the case that European commercial property investment would be immediately boosted at the expense of investment in the UK. … What …
13th April 2016
Positive consumer sector fundamentals reinforce our belief that prime retail rental values in Prague will rise by 3.7% p.a. in 2016-18. Low alternative asset yields and positive fundamentals mean that although prime retail yields have dropped to just …
8th April 2016
Early indications from Q1 2016 suggest that office yields in Oslo are coming under upwards pressure. Although consistent with the weakening rental market, this is contrary to our current forecasts. However, until complete Q1 data is released, it is too …
5th April 2016
With property yields in Western Europe at historic lows, investors are looking to core CE markets for higher income returns. This will lead to heightened competition for assets in these markets and drive all-property yields down by 65bps by the end of …
1st April 2016
We expect Denmark’s economic recovery to strengthen further, with employment growth in particular solidifying. This will drive a further pick-up in demand for offices and, although much of the new demand is for out-of-town space, prime rents will be …
31st March 2016
Despite the ECB’s recent monetary loosening, we expect further stimulus measures will be required to reinvigorate growth and push inflation back towards its target. This will prove to be a net positive for prime property, which will continue to be seen as …
23rd March 2016
Steady improvement in the Dutch consumer sector in the next few years will support expansionary retailer demand and drive rental growth rates above those we had previously forecast. We now expect rental growth of 3.3% p.a. in Amsterdam and 2.3% p.a. in …
22nd March 2016
Office rental values in Berlin, Hamburg and Munich now stand, on average, 7% above their prior 2008 peaks, and at their highest levels in 15 years. Even so, the positive economic outlook, low development pipelines, and falling vacancy rates lead us to …
17th March 2016
Finland’s poor economic outlook will not prevent prime office rents from growing further in the next few years. Indeed, we have bumped up our rental growth forecasts for 2016 and 2017 to 3% and 2.5%, from 1.5% and 2% respectively, when compared to six …
16th March 2016
In 2015, office vacancy rates fell in most euro-zone markets. With supply conditions tightening, and office employment picking up at a steady pace, almost every market will see office rents rise this year. … Rising office employment points to rental …
15th March 2016
The outlook for European consumers is relatively poor. Nevertheless, we expect a handful of structural factors to keep prime European retail rents on an upwards trend, growing by 3% y/y. … European prime retail rents show no sign of …
11th March 2016
Office rents in Vienna declined last year. But with the office vacancy rate amongst the lowest in the euro-zone, and the supply pipeline small, even low levels of demand will drive rents higher. … Limited supply means the fall in Vienna office rents …
9th March 2016
The recovery in Hungarian consumer spending is likely to be sustained, boosting occupier demand from new entrants. In the absence of new supply, this will drive rents upwards and encourage investment demand. The upshot is that we expect total returns to …
8th March 2016
Capital value growth is likely to have peaked in 2015, but further falls in yields and steady rental value growth will keep capital values rising in 2016 and 2017. Yet, there will be country and city-level differences. The Norwegian and Turkish markets …
4th March 2016
Compared to our last Analyst, we have increased our expectations for rental growth in some markets, and also pushed down our near term forecasts for property yields. Yet in most markets, lower yields in 2017 will lead to greater upward yield pressure in …
In recent years, across Europe, yield compression has been by far the largest driver of capital value growth. Yet property yields are fast approaching their limit. That means we now need to see a pick-up in rental growth, not only to keep capital values …
29th February 2016
There is a risk that medium-term rental growth in Poland will be lower due to the populous policies pursued by its new government. However, in the short-term, we think property investors will be more influenced by the weakness of the zloty, which will, at …
26th February 2016
