Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
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
The surge in the Czech industrial development pipeline has coincided with a marked softening in the occupier demand outlook. But we do not think that the vacancy rate will return to 2009’s highs, while the low level of Czech industrial rents also reduces …
15th November 2011
Most non-euro-zone European economies will avoid a recession in 2012, but not a marked slowdown in GDP growth. Even so, the weaker outlook for occupier demand suggests that rental value growth in most markets will, at best, slow sharply over the next year …
10th November 2011
We expect the euro-zone to fall back into recession in 2012 and 2013. We have therefore cut our commercial property forecasts to reflect the weaker economic backdrop. Over the next two years, we expect most markets to experience some renewed falls in …
The weakening in sentiment towards European property markets revealed in the latest RICS survey is unlikely to be temporary. To our minds, if anything, it highlights the downside risks to consensus forecasts for economic growth and thus reinforces our …
4th November 2011
We have recently downgraded our forecasts for the Hungarian economy and now expect GDP to contract by about 0.5% in 2012. This is unlikely to drive a renewed slump in commercial property rental values. Even so, the risks are clearly to the downside and we …
2nd November 2011
This year’s changes to property taxation in Ile de France could result in a larger proportion of the potential office development pipeline being delivered to the market than otherwise might be expected. If this coincides with a sharp slowdown in occupier …
28th October 2011
Recent declines in Moscow commercial property yields have been steeper than we had expected. Even so, there are now signs that investment demand is softening. If we are right that the economy will cool and global risk appetite will fall further, there is …
25th October 2011
The stability of Spanish office capital values over the past two years does not preclude a second leg to the downturn. If anything, the prospects for office occupier demand and rental values have worsened in recent months, a development that is likely to …
21st October 2011
Record levels of commercial property investment in the Czech Republic in Q3 2011 were driven by the retail sector. But retail property in the Czech Republic is starting to look expensive compared to other European markets, and there are rising risks …
19th October 2011
Survey evidence suggests that the main German cities, as well as Geneva and Moscow, are the current, preferred destinations for firms looking to expand into new markets. Yet while this points to a relatively healthy outlook for office occupier demand in …
15th October 2011
Ireland’s robust rebound in economic output so far this year does not appear to have meaningfully improved the health of Dublin’s commercial property occupier markets. Although rents may now have stabilised, it will be some time before they begin to …
13th October 2011
For now, the risks of a marked fall in prime industrial rental values in Germany look low, despite the recent downbeat industrial data. But the comparatively low level of industrial yields in Germany leave property there more vulnerable than most to …
8th October 2011
Yesterday’s retail sales data showed that domestic demand is weakening across most of Europe. And there is little reason to expect the pace of household spending to improve in 2012. Against that backdrop, the recent expansion in 2012’s European retail …
7th October 2011
The office market in Oslo has been one of Europe’s star performers over the past year. Yet, there are good reasons to believe that the best of Oslo’s office occupier recovery may now be behind us. Indeed, we expect office rental value growth to slow …
1st October 2011
Our sub-consensus view that Polish GDP growth will slow to about 2.5%y/y in 2012 might suggest that the recent surge in commercial property investment activity could lose momentum. However, even if our cautious view on the economy plays out, Poland’s …
28th September 2011
Anecdotal evidence suggests that many investors believe that the Italian retail market offers a better risk profile than offices or industrial. We are not convinced. Indeed, with consumer spending likely to contract in 2012 and 2013, the risks to retail …
24th September 2011
The recovery in Hungary has disappointed in recent months and economic growth is likely to remain lacklustre in 2012 and 2013. That represents a downside risk for commercial property, but especially the Budapest retail market, where pricing seems most …
22nd September 2011
Q2 GDP data from Turkey look pretty encouraging. Yet we think that the economy is on track for a hard landing next year. This alone does not alter our views on the prospects for commercial property rental growth. But together with other factors such as …
14th September 2011
July’s fall in Spanish industrial production extended the recent run of disappointing manufacturing data. The deteriorating outlook for occupier demand suggests that take-up levels will remain at very depressed levels for the foreseeable future and …
9th September 2011
In contrast to Western European property markets, investment volumes in CEE have continued to rise. But the latest batch of disappointing economic data from Emerging Europe suggests that investor sentiment toward this region could rapidly deteriorate. … …
7th September 2011
The rapidly slowing trend in CEE office completion volumes seen over the past couple of years looks set to be extended next year. But this does not imply that the region will face a shortage of office supply. Indeed, if we are right that occupier demand …
2nd September 2011
If we are right that prime retail yields in Stockholm will fall further than those in Oslo, Helsinki or Copenhagen, relative pricing levels across Nordic retail markets will move out of kilter with recent norms. But in our view, that is justified by the …
1st September 2011
The recent flow of bad news on the German economy might suggest that the office market is beginning to look expensive. Yet, office/bond yield spreads are nearly as high now as they were at their peak and, although lacklustre, the economic outlook in …
26th August 2011
Q2’s sharp slowdown in GDP growth in the euro-zone’s so-called “core” economies is a worrying sign that investor sentiment across the region as a whole could fall sharply in the near term. If that is the case, then we think it is unlikely that euro-zone …
24th August 2011
Now that it is clear that the economic weakness observed in the euro-zone’s peripheral economies over the past year or so is spreading to the region’s core, commercial property investors might begin to re-evaluate where the fundamentals are sufficiently …
17th August 2011
The relatively strong macro drivers of industrial occupier demand in Belgium and the Netherlands are consistent with the fact that industrial rents in Brussels and Amsterdam are outperforming the rest of the region. However, we suspect that even the …
16th August 2011
To date, the strength of demand from international retailers seeking to enter the French retail market has been sufficient to offset softening demand from incumbent brands, in turn helping to support retail rental values. But Q2’s steep decline in …
13th August 2011
The current, double-digit pace of rental value growth in the Warsaw office market is not sustainable. But despite a large development pipeline, we believe that Poland’s relatively solid economic outlook is consistent with rental value growth of roughly 2% …
9th August 2011
Non-euro-zone economies will not be immune from the slowdown now unfolding in the single currency area. A slower pace of economic growth coupled with concerns about potential contagion from the crisis is likely to weigh on investment activity in Central …
5th August 2011
The weakening economic outlook for the euro-zone economy is likely to act as a brake on the recovery in commercial property markets over the next year or two. Rental value growth will moderate in most markets and in the weaker peripheral economies, …
Over recent weeks, the downside risks to our forecasts for a modest recovery in retail rental values in Prague this year have increased. But, if we are right, some of the factors weighing on Czech household spending will begin to ease in the second half …
29th July 2011
We suspect that Q2’s fall in yields may mark the end of the road for the German industrial investment market recovery. As our fears of a rapid slowdown in the manufacturing recovery are borne out, rental expectations are likely to be revised downwards and …
26th July 2011
This morning’s flash euro-zone PMI release suggests that economic recovery in the region may have ground to a virtual halt. The fact that euro-zone manufacturing output is now barely rising supports our forecast that a recovery in euro-zone industrial …
22nd July 2011
It looks increasingly likely that the sovereign debt crisis in the euro-zone will take a heavy toll on the Swiss economy. As a result, the emerging recovery in Swiss commercial property rental values is likely to stall over the next 12-18 months leaving a …
21st July 2011
It is tempting to dismiss the recent slump in office market take-up in Brussels as noise in an otherwise positive trend. But it could reflect the early stages of a labour market slowdown as firms attempt to offset the recent rise in unit labour costs by …
15th July 2011
June’s drop in Polish footfall might suggest that the health of Poland’s retail occupier market is not as strong as many believe. However, the footfall figures are volatile. Together with the strong macroeconomic drivers of retail occupier demand, that …
14th July 2011
Rising construction confidence in Europe may be a sign that commercial property developers are gaining in optimism about the outlook for occupier demand and preparing to boost supply pipelines. Yet, forward-looking surveys suggest that the pace of …
7th July 2011
Relative to historic norms and compared to many other markets, property/bond yield spreads in Stockholm seem quite low. However, the above-average outlook for rental value growth suggests that these spreads could narrow even further. Given our view that …
6th July 2011
Despite concerns about its solvency, financial markets are still giving the Italian economy the benefit of the doubt. For now, property investors are treating Milan’s office market in a similar fashion. Yet, with poor transparency, low liquidity and …
2nd July 2011
The strength of the Norwegian and Swedish economies is consistent with reports that investment demand for commercial property in the Nordics among international funds is on the up. However, high barriers to entry are likely to act as a brake on …
30th June 2011
Q1’s sharp rise in Irish GDP is not as encouraging as it first seems. Although the external sector appears to be booming, we do not expect this to last. More worryingly, domestic demand continued to weaken. As a result, we still do not expect rental …
24th June 2011
The trend for investment volumes among CEE property markets still appears to be upward. However, activity remains well below peak levels and restricted only to a handful of markets, namely Poland, Russia and the Czech Republic. For now, we expect …
23rd June 2011
Signs that French consumer spending has fallen sharply over the past couple of months might make our forecast for retail rental values to track sideways this year look too optimistic. Yet, in the absence of a consumer recession – which is not our view – …
18th June 2011
The Viennese office market seems to be suffering from the weakness of cross-border investment activity in Europe. Nevertheless, the economic fundamentals look sound, suggesting that over the next year or two there is potential for Vienna to experience …
16th June 2011
The recent underperformance of industrial rental values in Warsaw relative to rest of Emerging Europe appears to stem from the fact that consolidation rather than expansion has been a key driver of take-up in recent quarters. However, with stronger …
8th June 2011
The Q1 2011 RICS distressed property monitor points to the largest rises in the number of distressed properties coming onto the market in Q2 in Spain and Ireland. Investment demand in Ireland will not be strong enough to absorb this space. In Spain, …
6th June 2011
Q1’s fall in Danish consumer spending suggests that it may take a little longer for retail rental values in Copenhagen to recover than we previously expected. Given their low level, we cannot rule out the possibility that the worsening rental outlook will …
2nd June 2011
Emerging European property markets are outperforming the rest of non-euro-zone Europe both in terms of rental growth and yield compression. Yet, the pace at which yields are falling is slowing in all regions and we think that the prospects for further …
1st June 2011
