Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
The compression in office yields in Bucharest seen over the past two years is hard to reconcile with weak financial service sector activity, and the implied weakening in occupier demand. Therefore, we see no reason to revise our forecast that Bucharest …
18th May 2012
The euro-zone economy narrowly avoided falling back into a technical recession in Q1. But GDP merely stagnated and survey evidence point to renewed falls to come. In any event, the economic slowdown seen over the past year now seems to be negatively …
16th May 2012
Last week’s Q1 2012 RICS Global Survey revealed a divergence in surveyors’ expectations for commercial property rental growth in Emerging Europe. We agree that the outlook is brightest in Russia and worst in Hungary and Romania. But the message from the …
10th May 2012
Euro-zone capital values suffered a fall in Q1. Although the decline was small, it was pretty widely based. As a result, it does nothing to alter our view that euro-zone commercial property markets face a double-dip this year and next. … Is the Q1 fall …
8th May 2012
Non-euro-zone European economies will not be immune to a fresh recession in the euro-zone. We expect all economies in the region to undergo a sharp slowdown in growth or worse. Barring perhaps Poland, Russia and Turkey, we do not think that occupier …
2nd May 2012
Over the past few months we have seen little reason to alter in either direction our euro-zone commercial property forecasts. With no resolution in sight to the region’s debt crisis, we think that all member states will slip back into recession in 2012 …
The results of the KOF survey released this morning did little to change our view that office rents will decline this year. Subdued economic growth is likely to trigger fresh weakness in the labour market with the result that office rental values fall by …
27th April 2012
An analysis of real estate equity prices suggests that our strongly negative capital value growth projections for 2012 may be pessimistic. However, since equity markets have not yet fully priced in the fragmentation of the euro-zone – a scenario which is …
23rd April 2012
In our view, the plunge in French commercial property investment volumes in the first quarter of 2012 highlights some fundamental weaknesses in the market. And if we are right that the French economy will slip back into recession this year, the fact that …
18th April 2012
The fact that the Irish economy slipped back into recession in the latter half of last year lends support to our view that, taking 2012 and 2013 together, Dublin office rental values will fall by a further 10%. However, preliminary agency data, which …
16th April 2012
February’s unexpected rise in euro-zone industrial production might raise hopes that the strength of industrial occupier demand in the single currency region has improved. But we are not convinced. The narrower measure of manufacturing production revealed …
12th April 2012
To the extent that the latest sell-off in Spanish and Italian bonds prompts investors to steer clear of commercial property in either market, the resultant drop in liquidity is likely to put upwards pressure on property yields. In any event, with Italy …
11th April 2012
This morning’s PMI data suggest that business activity in the euro-zone’s service sector remains subdued. And if the past relationships between employment PMIs and office rental value growth continue to hold, it looks as though the rental value recoveries …
4th April 2012
February’s fall in German retail sales volumes served as a timely reminder that the strong recovery in retail rents in the euro-zone’s largest economy cannot be taken for granted. Nevertheless, while retail rental growth should slow, the continued …
2nd April 2012
Yesterday’s retail sales data from Poland suggest that occupier demand for retail floorspace in Warsaw is still strong relative to most of Europe. But the big picture is that consumer spending growth is likely to slow by more than most expect this year. …
27th March 2012
2011 was a record-breaking year for take-up in the Budapest office market. Yet this failed to drive any form of recovery in office rents. Unfortunately, with employment set to fall and occupier confidence to remain low, it looks more likely than not that …
26th March 2012
Recent macroeconomic indicators from Denmark might raise hopes that the outlook for Copenhagen retail rental values has improved significantly. But with the impact of past falls in household spending still yet to be seen in the rental data, and a strong …
22nd March 2012
Within Europe, office markets in the euro-zone’s peripheral region appear to be most at risk of oversupply over the next two years. But less obviously, office markets in Amsterdam and Budapest also look at risk of an unfavourable combination of supply and …
20th March 2012
In our view, over 2012-13, Portugal will endure the second deepest recession in the euro-zone. Even so, the gap between the Portuguese property/bond yield spread and its long-term average is by no means unusually high. Given that, and the weak rental …
16th March 2012
Investment market activity across Central & Eastern Europe (CEE) in the final stages of 2011 was not as weak as the initial estimates suggested. Even so, because of the weak economic outlook for most countries in the region, which will tend to dampen …
13th March 2012
Prime office capital values in Munich in 2011 outperformed the other main German cities, thanks mainly to a sharp rise in office rents. But while this rise might have raised the scope for office rents in Munich now to undergo a period of relative …
8th March 2012
One interpretation of the sharp jump in investment activity in Spain at the end of last year is that overseas investors stepped up their interest in distressed property in anticipation that values may be close to, if not at, a floor. Yet if the economy …
6th March 2012
This morning’s news that Swedish GDP contracted by 1.1%q/q in Q4 last year suggests that our forecast for Stockholm industrial rents to fall by 1% this year may now prove to be too optimistic. Whether that is true or not, the outperformance of Stockholm …
29th February 2012
The strong increase in take-up in the Dublin office market in 2011 is not as encouraging as it first seems. For one thing, survey evidence and labour market data suggest that the strength of underlying occupier demand is still deteriorating. As a result, …
28th February 2012
2011 was a relatively strong year for Emerging European commercial property markets. But falls in yields and increases in rents became smaller and less widespread in the final quarter of the year. As a result, the performance gap between the East and the …
24th February 2012
This morning’s “flash” release of euro-zone PMI data poured cold water on hopes that Q4’s quarterly economic contraction would be a one-off. Indeed, it looks as though the euro-zone is now in a technical recession, suggesting that occupier demand for …
22nd February 2012
The final quarter of 2011 brought the strongest evidence yet that the downward phase in euro-zone commercial property yields has not only come to an end, but has started to go into reverse. Falling economic output even in the region’s strongest economies …
16th February 2012
News from the Czech Republic this morning revealed that it slipped back into a technical recession in the second half of 2011. This has had little meaningful impact on the commercial property market so far. But, in common with Hungary and Romania, we …
15th February 2012
We think that Dutch commercial property values will fall this year and next as the economy slides back into recession. But one view, emanating from the Netherlands Central Bank (DNB) last week, is that structural weaknesses in the market also pose …
10th February 2012
Recent survey evidence suggests that the rental outlook in France is about as bad as it is in Portugal. We agree that the prospects for French rental values are pretty weak. However, the sheer scale of economic downturn that we expect in Portugal over the …
6th February 2012
The UK appears to have fallen down the rankings as a target market for global property investors. In absolute terms, there is plenty of cause for caution about the outlook for UK capital values and total returns. But the prospects for the euro-zone …
1st February 2012
Over the past year, retail rental values have bucked the downward trend still evident in Spanish office and industrial rental values. But data showing that unemployment surpassed the 5 million mark in the fourth quarter and that weak domestic demand …
30th January 2012
Events in the euro-zone will act as a drag on property markets throughout Europe. As a result, most non-euro-zone commercial property markets will suffer some renewed falls in capital values this year, as growth drops below the rates needed to sustain …
26th January 2012
The recovery in capital values seen in most euro-zone property markets over the past year or so, looks set to be reversed in 2012. As the economy slides back into a deep recession, occupier demand will contract and rental values will fall. The recession …
All the headline indicators for the German office market, i.e. take-up, vacancy rates and rents, moved in the right direction last year. But we expect the final stages of 2011 to prove to be the high-water mark. With another recession and falls in …
19th January 2012
Fears that the recent sell-off in Hungarian assets might spread to commercial property markets across CEE are probably overdone. But in reality it will be hard to distinguish contagion effects from the impact of weaker economic growth and the risk of …
17th January 2012
December’s anti-government protests in Russia will no doubt have put political uncertainty back at the forefront of investors’ minds. Together with the prospect of much weaker economic growth this year and continued declines in global risk appetite, this …
11th January 2012
Bond investors’ growing preference for German over French sovereign debt is unlikely to be mirrored fully by commercial property investors in 2012. Valuations as well as economic fundamentals suggest that the demand for German property could gain at the …
9th January 2012
Given the prospect of a recession in Turkey this year, it could be argued that property yields are currently too low. Indeed, we expect them to increase this year. But their apparent resilience during the credit crunch and the positive long-term prospects …
5th January 2012
The spread between property yields in core and peripheral euro-zone markets has risen fivefold over the past four years. But with the risks both to occupier markets and to the survival of the euro-zone itself still increasing, that spread could very …
3rd January 2012
If we are right that all euro-zone member states will fall back into recession next year, commercial property investment volumes in the region are likely to be a major casualty. We would not be surprised if Europe-wide property investment volumes in 2012 …
20th December 2011
Switzerland does not seem to be awash with vacant industrial property, so the risks of a slump in rental values in this sector over the next year or two are low. But the looming euro-zone recession will be a major blow to the Swiss external sector and …
15th December 2011
In recent years, the spread between Spanish retail and office yields has switched from positive to negative. This is typical in other countries and also squares with the long-run outperformance by Spanish retail rents. Thus, the negative spread is no …
13th December 2011
The economic and financial market dislocations that will arise from a break-up of the euro-zone will have severe, negative consequences for euro-zone commercial property markets. Indeed, we think that over the next two years, a rise in yields and renewed …
9th December 2011
The strength of Warsaw’s office occupier market over the past couple of years suggests that the large and increasingly speculative development pipeline is not a risk to the rental outlook. However, a number of factors mean that the Polish economy is more …
6th December 2011
Q3’s plunge in Swedish consumer spending suggests that the outlook for the retail property market has deteriorated. Nevertheless, the low retail vacancy rate in Stockholm, together with strong demand from international retailers, is likely to prevent …
1st December 2011
Led by Poland and Russia, commercial property markets in CEE have been a relatively bright spot for investment in Europe. Yet, even here, growth in quarterly investment volumes has begun to slow. And despite survey evidence which still points to …
29th November 2011
Retail rental value growth in Amsterdam over the past year has been strong relative to other euro-zone markets and also relative to the office sector. In our view, there is little justification for the retail market’s outperformance and, in fact, we think …
24th November 2011
Uncertainty about the euro-zone economic outlook is prompting property investors to act more cautiously. Activity in Q3 was driven by deals initiated before the summer’s turmoil. We agree with survey evidence which points to a slowing investment market …
21st November 2011
The prospect of a renewed recession in Italy is likely to mean that in each of the next two years all of the main commercial property sectors will see capital value falls. But the weak outlook for consumer spending suggests that retail returns over …
16th November 2011
