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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
Investment activity appears to have plateaued in Central Europe. But if one includes ‘platform deals’, the picture is more positive. That said , there are factors holding volumes back, including a mis -match between buyers’ and sellers’ price …
22nd October 2015
This report is only available as a PDF. Click to download. … Cities to see stronger population growth than Germany as a whole …
19th October 2015
Since early 2012, the rental premium commanded by prime office space in Munich over that in Hamburg has grown by almost a third. However, in the next few years both demand and supply fundamentals suggest it is more likely to rise further than to go into …
14th October 2015
The Polish regional cities are seeing strong demand from the BPO/SSC sectors. But the office space development pipeline has responded equally robustly. Therefore, although demand growth is set to remain strong, if not strengthen further, rental values …
13th October 2015
Nordic investment activity has already surpassed 2014 levels as exchange rate weakness in the region has created improved perceived value for foreign investors. We expect foreign buyers to account for a growing share of activity and to be willing (and …
12th October 2015
With government and corporate bond yields at all-time lows in most of Europe and equity dividend yields close to their long-term averages, European commercial property looks relatively well-priced. The greatest value appears to be in some of the …
8th October 2015
There is a decent correlation between economic competitiveness and property pricing across Europe. Yet while some markets look mispriced based on this comparison, that’s partly explained by the fact that some of the factors that drive competitiveness are …
5th October 2015
Buoyed by strong economic conditions, industrial occupiers in Central Europe are expanding, leading to falling vacancy and rising rents. However, supply is responding. We expect this to curb rental growth in Poland from 2016 and the Czech Republic from …
1st October 2015
The cross-border nature of automotive supply chains means that it is not just Germany that may be affected by the Volkswagen scandal. The Czech Republic also looks exposed. While automotive related production tends to be in peripheral locations rather …
28th September 2015
Political factors pose less risk to the economic outlook in Portugal than in Spain. Nevertheless, the underlying economic outlook for Portugal is weaker, which will weigh on occupier demand in Lisbon. The retail sector could buck the trend however, as …
24th September 2015
