Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
Over the last year or so, spreads over sovereign yields have narrowed to their lowest since the euro-zone debt crisis. But while these are expected to widen again over the next year, mostly thanks to falling bond rates, they look set to stay well below …
13th September 2023
After a strong 2022, annual office rental growth has slowed in Italy in H1 2023. And given the contraction in employment we are forecasting, together with increased supply, we think prime rents will largely stagnate both in Milan and Rome until 2025. …
12th September 2023
The Budapest office market has underperformed in recent years, with rents lagging the rest of the region. While some weakness is likely for the rest of this year, the outlook is improving. With a more limited supply pipeline and improving demand, Budapest …
7th September 2023
The latest real estate data suggest that the current drop in capital values in the euro-zone will be as bad as the post-GFC correction. But market sentiment has been less negative this time, particularly for occupiers, which we think largely reflects the …
6th September 2023
While the macro backdrop was broadly unchanged, rents were stronger and yields were higher than expected in Q2, forcing us to re-examine our 2023 real estate view. As a result, we have edged down our end-year all-property view for capital values. This now …
31st August 2023
A strong rebound in tourism has bolstered retail rents in Spain and Portugal over recent quarters. However, we think this boom has run its course. Alongside a weak domestic consumer outlook, this should keep Iberian retail rents subdued for the rest of …
30th August 2023
The German retail market has been one of the weakest in Europe since the beginning of 2022 and rental performance so far in 2023 has been well below the euro-zone average. But, with consumer confidence and high street footfall improving, vacancy …
24th August 2023
Our latest Europe commercial property valuation monitor is embedded below: Property yields rose across all sectors and markets in Q2. However, this was somewhat offset by rises in bond yields in most countries. As a result, valuations remain stretched in …
23rd August 2023
The slowdown in rent growth in the first half of this year is likely to persist given the weak economic backdrop. Although the property price correction has slowed, we think stretched valuations will push yields higher and drive further capital value …
18th August 2023
Property yields have risen less sharply this year, but there remains considerable uncertainty about where they will peak. We returned to our yield model for guidance and, while a re-specified equation supports our view that office yields will top out at …
Bucharest offices have been CEE’s best performing so far this year, as rent growth has accelerated rapidly. Although we expect growth to slow sharply from 2024, constrained supply of prime space and persistently high inflation suggest prime rents will …
10th August 2023
While Paris rents have been flat for some time, there are signs that the post-pandemic rebound in tourism is starting to boost high street luxury retail. And the upcoming Paris Olympics in 2024 will also add to demand, meaning retail rental growth should …
8th August 2023
We recently held a Drop-in titled “Office Sector Armageddon – Who gets hit hardest?”, which you can view on-demand here . This Update addresses some of the specific European questions we received during the event. Which European cities will do better? At …
3rd August 2023
Warsaw industrial rents have seen an unprecedented surge in recent months on the back of strong demand and supply constraints due to the war in Ukraine. And while growth is set to slow significantly from here, we now expect the market to outperform the …
1st August 2023
H1 2023 was the weakest six months for European investment in over 10 years. And the difficult financing conditions and stretched valuations that have sapped investor sentiment are unlikely to relent much over the rest of the year. Further ahead, even as …
28th July 2023
Occupier demand in Amsterdam has been more resilient than we expected so far this year. In tandem with supply constraints caused by construction delays, this suggests that prospects for rental growth are brighter than we had anticipated over the coming …
24th July 2023
After trailing the rest of Europe last year, the Dublin industrial market has had a change of fortune in 2023 as rent growth continued to improve. With industrial demand set to benefit from a relatively strong domestic economy, greater trade with Northern …
21st July 2023
We have made only minor changes to our latest global forecasts which still imply that property will underperform other assets in the short to medium term. Further out real estate returns are set to recover, but, with yield spreads more compressed than in …
19th July 2023
Out of town retail has been among the hardest hit commercial sectors since 2020, but with considerable variation among subsectors. While a weak consumer backdrop will drag on near term rent growth across the board, further out we expect this variation to …
17th July 2023
After a lacklustre 2022, the Brussels prime office market has had a brighter start to 2023, as rent growth accelerated while it slowed elsewhere in the euro-zone. But with a cooling jobs market set to weigh on net absorption and tight supply due to give …
10th July 2023
The pandemic-induced shift towards homeworking caused a sharp fall in physical office occupancy rates. They have since recovered significantly but remain below pre-pandemic levels. And while lower physical office occupancy will feed through to weaker …
6th July 2023
We recently held a Drop-in titled “Industry’s decarbonisation challenge – From aviation to property”, which you can view on-demand here . This Update addresses some of the questions we received during the event, including those that we did not have time …
3rd July 2023
Overview – The slowdown in rent growth at the start of this year is likely to persist given the weak economic backdrop. And although the property price correction has slowed, we think stretched valuations will push yields higher and drive further …
After several disruptive quarters, we are making few changes to our near-term euro-zone real estate forecasts. Nonetheless, a higher profile for 10-year rates has led us to push back yield reductions until after 2025 and we have also downgraded our office …
26th June 2023
Swiss offices have already seen the second sharpest price correction across the major European markets. And with stretched valuations set to face renewed pressure from rising bond yields, we think office yields will edge higher and that sluggish rent …
23rd June 2023
The latest MSCI data indicate that values in western European office markets have held up better since the start of the pandemic when compared with the US and UK. But given these cities face similar long-term problems, we remain downbeat about the …
16th June 2023
In our Focus of Sept ember 2020, we made some assumptions about how the pandemic would impact working from home in office-based sectors across Europe. Almost three years on, we look back at these to assess how they have held up and analyse the …
15th June 2023
Recent economic difficulties have forced online retail to tighten their returns policies. At face value, this seems good news for retail property as it may shift demand back to stores for certain categories. However the change is unlikely to be a big …
8th June 2023
Early 2023 data revealed that the German industrial market has slowed considerably following the exuberance of a year ago. And looking ahead the outlook is not much brighter. We were already anticipating a significant moderation of rent growth this year …
5th June 2023
In contrast to the deceleration across the rest of Europe, the rise in CEE yields in Q1 was bigger than in Q4, driven predominantly by the industrial sector. As the yield gap with the euro-zone is still narrow and valuations are more stretched that …
1st June 2023
European property valuations continued to improve in Q1 on the back of further increases in property yields as well as falls in government bond yields. Nonetheless, all office and industrial markets aside from Istanbul remained overvalued. Indeed, we …
31st May 2023
As in the euro-zone, the rise in prime property yields in Scandinavia slowed sharply in Q1 after the surge in H2 2022. Along with decent gains in rents, where Oslo offices and industrial saw the fastest growth, this meant that the decline in capital …
26th May 2023
In contrast to the rest of Europe, CEE yields not only rose, but increased more sharply in Q1 than the previous quarter. (See Chart 1.) Strong rental growth cushioned the blow to all-property capital values, but that did not prevent a partial reversal …
24th May 2023
Capital value falls slowed in Q1 as the surge in euro-zone all-property yields cooled. But, with rent growth decelerating across all sectors, the increase in yields was still enough to drive another 4% q/q fall in capital values. (See Chart 1.) Although …
19th May 2023
May’s IPF Consensus Forecasts highlighted another upgrade to short-term euro-zone office rental expectations. Our figures remain significantly weaker for 2023. From next year, our view is closer to the IPF average, though we still think the consensus …
17th May 2023
The recent downgrading of Swedish property company SBB’s credit rating to “junk” and the ensuing market fallout have highlighted financing fragilities in the Swedish property market. But, while SBB is not alone in facing a sizeable financing challenge, we …
11th May 2023
Although recent data suggest that Paris offices had a slow start to the year, we think this weakness will be short-lived. Indeed, with demand prospects looking favourable and new supply set to slow, we think Paris prime rental growth will outperform other …
10th May 2023
Although rent growth has been resilient, as the Swedish economy enters recession and employment contracts, we think the recent slowdown in Stockholm office occupier demand will persist. And with new office supply set to reach record highs in the next few …
5th May 2023
Berlin offices have been outperforming those in other German markets for some time. But Q1 data suggest that growth has begun to falter, and we think that the recent strength of the market won’t last. Berlin office rents have risen rapidly over …
3rd May 2023
The slowdown in European investment intensified in Q1 as transactions more than halved year-on-year. This was perhaps unsurprising given the ongoing price correction amid one of the sharpest tightenings of financial conditions on record. But, with …
28th April 2023
Industrial occupier demand in Spain is set to slow sharply this year and next, as the economy falls into recession. And with both Madrid and Barcelona poised to see a record level of speculative development in the same period, we think Spain’s prime rent …
25th April 2023
The physical risks facing commercial property are substantial with extreme weather events like floods and wildfires set to increase in both the US and Europe over the coming decades. Property markets have yet to fully price these in, especially in areas …
21st April 2023
Listed markets in Europe have been surprisingly downbeat about prospects for real estate relative to other regions. While we think that largely reflects mis-pricing in equity markets, it provides a reminder of the potential downsides as long as the …
20th April 2023
After a strong 2022, we expect Warsaw offices to face a more difficult time ahead. Falling employment and hybrid working practices will limit any revival in demand after 2023 and leave rents underperforming both the CEE and wider European averages. The …
14th April 2023
Are European and UK commercial real estate markets facing the same level of distress as the US? Join our Property Drop-In on Wednesday, 14th February to learn more, Register here for the 20-minute session. Recent turmoil in the banking sector has …
11th April 2023
Real estate exposures have not been central to financial developments in Europe over recent weeks, but, as property prices correct after a decade of steady expansion, some strains are likely to emerge. While not appearing systemic, these fragilities …
6th April 2023
Overview – Property values fell sharply in Scandinavia and Switzerland last year, but with valuations still stretched and financing set to remain challenging, we think yields will climb higher. And with economic activity weakening and supply increasing, …
4th April 2023
Overview – Emerging Europe has seen less steep falls in values than elsewhere so far, but will not be immune in 2023. Higher interest rates and economic weakness mean these markets will have a challenging year and recent financial disruption only …
31st March 2023
Click here to read the full report Overview – With valuations still highly stretched and rent growth likely to slow as the region falls into recession, we think capital values will fall further in 2023. While the 4.5% decline forecast at the all-property …
24th March 2023
While real estate is not the main cause of the current financial turbulence, as it was in the late 2000s, it has played an indirect role and may be implicated in any further instability. And property will also be vulnerable to the effects of recent …
21st March 2023
