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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
Given the historic correlation between property yields in Lisbon and Portuguese government bond yields, the recent spike in bond yields seems worrying. Although a correction in property yields does not seem imminent, recent market volatility supports our …
25th February 2016
Compounded by a negative rental growth outlook, Oslo offices appear overvalued. However, with foreign investors likely to be lured by the historically weak kroner and domestic investors keen on prime property’s relatively secure income yield, we still …
23rd February 2016
Office rental values recorded their strongest quarterly gain since 2011 in Q4. Yet at the all-property level, yield compression, rather than rental growth, proved to be the main driver of capital values. Indeed, the 16bps fall in all-property yields in Q4 …
19th February 2016
The fourth quarter brought clearer signs of an economic slowdown in non-euro-zone Western Europe. And this economic weakness may help to explain the limited extent of rental value growth in Q4 across the sectors. Nevertheless, investor demand for property …
18th February 2016
Frankfurt’s office sector has struggled to shake off the legacy of the credit crunch and structural changes in the local labour market. Add in the likely dampening impact of the recent falls in equity markets, and neither a sharp rise in financial …
12th February 2016
The falls in office yields witnessed in 2015, alongside the stabilisation of yields for other asset classes, mean that European office property no longer looks undervalued. Indeed, whilst the majority of markets are now fairly valued, core markets such as …
11th February 2016
Prime yields fell substantially in 2015, but the rate of yield compression moderated in the third quarter. We think that yield falls will slow in most Western European markets in 2016, but that there could be further large drops in the periphery euro-zone …
10th February 2016
Despite the relatively slow economic growth we expect to see in France in the coming years, structural changes in the retail and logistics markets mean that occupier demand for industrial property will be robust. This will support rental growth of 1.8% …
5th February 2016
Retail rents in Madrid and Barcelona were flat in Q4. Yet the steady outlook for consumption, coupled with strong growth in tourism, suggests that rents will resume their upward trend this year. … Flat retail rents in Spain are not a sign of things to …
4th February 2016
The most notable development in the latest RICS Global Commercial Property surveys is the increase in the proportion of respondents who view property in the core European markets as expensive. Yet a downturn does not seem imminent, and further gains in …
2nd February 2016
We do not expect either a slowing in house price growth or the newly-built Mall of Scandinavia to derail our retail rental value growth forecasts for Stockholm. As a result, we believe that in terms of rental growth, over the next five years Stockholm …
29th January 2016
In view of their strong past relationship, the latest jump in corporate bond yields could be a sign of an imminent turning point for European property markets. However, we are inclined to look through this short-term volatility. Indeed, we expect European …
26th January 2016
Berlin became Germany’s largest investment market in 2015, with investment growth of 120%, far outpacing that in the other major cities. Despite Berlin ranking far above Frankfurt in surveys of investment prospects for 2016, over the coming years it is in …
25th January 2016
Lisbon has been highlighted as one of Europe’s top cities for investment prospects this year. Yet property yields are already at record lows. And as Portugal’s weak economic fundamentals limit the scope for a positive shock to income growth, it is hard to …
22nd January 2016
Fears about China, as well as plunging oil and equity prices, have dominated the start of 2016. However, we believe that concerns over China are overstated and that oil prices will begin to recover later in the year. As such, we think that commercial …
21st January 2016
In PWC’s 2016 Emerging Trends in Real Estate survey, the most notable change in the city investment prospects segment is Athens’ fall back to the bottom of the rankings. Elsewhere, investment prospects were generally deemed to be more positive than a year …
18th January 2016
We expect strong competition for prime assets to push yields lower again in 2016. With prime income yields at such low levels, this is likely to result in further growth in the demand for secondary assets. This will drive a reduction in the …
14th January 2016
The high level of industrial take-up in Italy over the past two years demonstrates the strong effect that e-commerce has had on occupier demand. With the Italian economy now on a positive, albeit subdued, growth path, and the availability of modern space …
12th January 2016
European commercial property investment is likely to have reached a new peak in 2015. But, we believe there are good grounds for expecting further growth in 2016 as new capital sources and other acquisitive investors continue to target European property, …
11th January 2016
Over the past three years office capital value growth in Dublin has far outpaced other euro-zone markets. Yet with the vacancy rate at its lowest point in 15 years, and GDP set to average 4.3% over 2016 and 2017, there seems scope for rental growth to …
6th January 2016
Commercial property investment in 2015 in the Nordics reached its highest level on record. This was driven by a large increase in the average deal size and strong growth in demand from foreign investors. We think that activity will remain strong in 2016, …
5th January 2016
Muted economic growth in the next two years will prevent Belgian high streets from seeing much of an improvement in demand for space. As a result, we expect prime retail rental values to rise by only 2.1% p.a. in Antwerp and an even weaker 1.4% p.a. in …
24th December 2015
The latest employment data show that office employment is far outpacing total jobs growth in most euro-zone economies. And, even in economies such as Germany and France, where office jobs growth has been weak, there are reasons to believe that rents …
23rd December 2015
After a record-breaking year in 2015, the latest data suggest that German industrial occupier demand will moderate next year. But, given supply constraints and occupier bases that are more aligned to distribution than production, we nevertheless expect …
17th December 2015
The loose monetary policy environment will help to underpin investor sentiment toward Spain in 2016, keeping property yields low despite an increasingly uncertain political backdrop. And with ample scope for rental growth, property values should …
15th December 2015
The outlook for Dublin industrial rental growth is supported by the fact that supply conditions are tighter than the 15% vacancy rate alone might suggest. And with ample scope for yield compression as well, total returns should move ahead of offices and …
10th December 2015
The construction of modern logistics space along the E20 corridor, south-west of Copenhagen, is transforming the region into the destination of choice for occupiers. With demand growth set to remain steady, we expect close to 2% p.a. rental growth for …
8th December 2015
Euro-zone retail sales are likely to remain fairly weak in the next couple of years. However, due to structural changes in the retail sector, expansionary retailers will continue to compete to secure high footfall locations, causing prime retail rents to …
4th December 2015
The latest data from Switzerland show that the removal of the euro exchange rate ceiling has taken its toll on the economy, and we expect that there is further weakness to come. Accordingly, even with employment in some office-based industries doing well …
2nd December 2015
The ECB has expressed concern at the high level of commercial property pricing. However, with alternative asset class yields set to stay low and the potential for further rental value growth, we think European property has at least another 2-3 years of …
27th November 2015
The impact of Spanish REITs on investment last year, and the growth of mergers and acquisitions this year, explain why headline figures appear to show a slowdown in Spanish property investment. Yet given that Spanish property still offers value, we expect …
24th November 2015
Since our last Analyst , the greatest change has been to our yield forecasts, which are now expected to decline further than previously expected in the next couple of years. We also envisage them staying at these low levels for longer. However, by 2019 we …
23rd November 2015
Compared to our last Analyst, we have increased our expectations for yield compression over the next two years. Yet in most markets, lower yields in 2017 will lead to greater upward yield pressure in the later stages of our 2016-2020 forecast period. …
20th November 2015
The French economy is growing, but slowly, and employment growth will therefore not be particularly strong. However, with signs of a recovery in occupier activity and a tight CBD market, we expect prime office rents in Paris to rise by a total of 9% in …
13th November 2015
The latest RICS Global Commercial Property Survey shows that around 70% of respondents believe that property in Germany and France is expensive. Yet while German capital values in particular have moved ahead of their euro-zone peers, we believe that …
10th November 2015
The economic recovery has perhaps been slowed by weaker demand from China and geopolitical concerns. However, property occupier markets are, on the whole, beginning to enjoy a better balance between supply and demand, meaning that rental growth momentum …
5th November 2015
Yield compression across each of the main property sectors picked up sharply in Q3, leading to the strongest quarterly fall in euro-zone all-property yields in the currency bloc’s history. With rental values picking up as well, capital values increased by …
Across the main German cities unemployment rates are close to their lowest levels in decades. Office rents do not look particularly high, office employment is growing, occupier demand is expanding and vacancy rates are falling. Therefore, the outlook for …
29th October 2015
French consumer spending growth is set to gradually improve in the next few years. This will support better rates of retail sales and occupier demand growth than previously anticipated, leading us to upgrade our retail rental growth forecasts for the 2016 …
27th October 2015
