Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
Higher government bond yields and falls in property yields across all sectors contributed to a deterioration in European property valuations in Q4. (See Chart 1.) While most industrial markets now look overvalued, for now we think that this is justified …
1st March 2022
The Russian invasion of Ukraine has added significant new uncertainty for investors. We expect Moscow property will take a substantial hit, but the impact on the wider European property market will be limited. We have outlined our initial thoughts about …
28th February 2022
Sharp falls in property yields and an improvement in rental growth pushed CEE all-property values in Q4 up almost 5% q/q, the strongest quarterly growth rate since 2007. (See Chart 1.) This was largely driven by the strength of industrial, but office …
24th February 2022
There was a material improvement in the Scandinavian and Swiss property markets over 2021. Prime office and industrial capital value growth accelerated. And while prime retail values still declined, this was at a slower pace than in 2020. Oslo was an …
21st February 2022
Euro-zone commercial property markets ended 2021 on a stronger note. Prime rental growth picked up in the office and industrial sectors, while retail rents held steady for the third consecutive quarter. Combined with further declines in property yields, …
17th February 2022
Our forecasts suggest that prime all-property rental growth across the main euro-zone markets is likely to keep pace with inflation in the coming years. However, this is more of a reflection of expected demand and supply conditions, than an indication …
14th February 2022
After a record-breaking 2021, survey evidence points to a strong start to the year for pan-European (excluding UK) investment volumes. With pent-up demand mostly exhausted, we expect transactions to slow in the second half of the year. Nonetheless that …
11th February 2022
The exceptionally strong rebound in commercial property returns has been clear from the middle of last year. While this came earlier than most expected, we think it reflected special conditions and won’t last. Despite increased uncertainty from the …
The recovery in Dublin offices has lagged the broader economic upturn. While demand is expected to improve in 2022, with a full supply pipeline, it is likely that vacancy will stay at relatively high levels over the next two years and rental growth will …
4th February 2022
While the recent improvement in world trade is encouraging for industrial demand in the major port markets, we don’t expect an acceleration in rental growth this year. Supply bottlenecks will still take time to unwind and the low availability of space and …
3rd February 2022
While we think the direct risks to property from the pandemic have reduced, the uncertain impact of structural change and our expectation that interest rates will now be increased from late this year reinforce our view that Stockholm property returns will …
28th January 2022
The early data indicate that Paris offices recovered last year, though much of this reflected strength in the core CBD market. With the economic background supportive and supply relatively contained, we expect further prime office rental growth at a touch …
27th January 2022
While we now expect the ECB to start its tightening cycle earlier, we don’t think the change is significant enough to prevent further property yield compression over 2022-23, albeit at a slower pace than in 2021. We recently revised our ECB policy view …
18th January 2022
Having been hit hard in 2020, improving economic conditions supported flexible office take-up in 2021, albeit caution and consolidation limited the net increase in space. While we expect take-up to remain low compared to the pre-virus period, we think it …
17th January 2022
Real estate potentially has a significant role to play in helping achieve ambitious climate targets. We have estimated the size of the risks in the transition to net zero for the commercial property markets that we cover. This risk varies widely across …
14th January 2022
An expected improvement in spending is encouraging for prime high streets this year. Nevertheless, with a growing share of retail turnover made online and city-based retail more vulnerable to remote working, prime high street rental growth is generally …
10th January 2022
We don’t expect slower near-term economic growth to derail the property upturn in 2022. Rather, we think that continued falls in property yields and a rebound in all-property rents will support further increases in capital values. That said, the pace of …
6th January 2022
While office performance surprised on the upside and we could have been much bolder in our forecast for industrial yield falls, our other forecasts for 2021 proved to be broadly correct. With the arrival of a new year, it is always worth looking back to …
5th January 2022
Despite tight supply and the boost to demand from e-commerce, we think Turkey’s recent currency crisis will further weigh on Istanbul industrial rents and that rental growth will slow sharply after this year. Echoing the trend seen elsewhere in Europe, …
23rd December 2021
The pandemic-driven boost in scientific research and development will support demand in the European life science sector, at least for the next few years. This bodes well for several markets we forecast, including Warsaw and Copenhagen. The shift to more …
20th December 2021
Overview – With the recovery running out of steam and the emergence of the Omicron variant posing a downside risk, the economic backdrop is likely to provide less support to the property recovery over the coming quarters . Nevertheless, we think that both …
16th December 2021
The rapid bounce-back in the US economy along with still-loose monetary policy will drive continued strong performance in real estate in 2022, when we expect returns to exceed 12%. That would see the US outperform the UK and euro-zone by 5%-pts and 3%-pts …
15th December 2021
Overview – The near-term economic outlook has weakened, though GDP in the region had already surpassed its pre-virus levels by Q3. Meanwhile, inflation is set to fall back next year, allowing most central banks to keep interest rates on hold. While the …
14th December 2021
Overview – The near-term economic outlook has weakened, with the Omicron variant posing further downside risk. Meanwhile, inflation is likely to be higher for longer. However, we expect it to fall back by 2023, allowing interest rates to remain low. This …
9th December 2021
After surprising on the upside this year, we think that the broad-based decline in Central and Eastern European (CEE) property yields will continue in 2022, albeit at a more modest pace. But with higher bond yields eventually weighing on valuations, we …
30th November 2021
Higher alternative asset yields and falls in office and industrial yields contributed to a further deterioration in property valuations in Q3. (See Chart 1.) The decline in government bond yields since then, which has been reinforced by concerns about the …
29th November 2021
The rebound in economic activity and robust investor demand paved the way for a continued improvement in Scandinavian and Swiss property markets in Q3. Office and industrial values rose further, as strong competition pushed down yields. (See Chart 1.) …
23rd November 2021
CEE property values completed the final leg of their recovery in Q3, fully reversing the nearly 5.5% peak-to-trough drop in 2020. With rents barely moving on the quarter, falls in yields did all the heavy lifting in driving capital values higher. CEE …
22nd November 2021
The recovery in euro-zone commercial property values picked up in Q3, supported by a small fall in yields and an improvement in the pace of rental growth. While retail rents held steady, the quarterly rise in both office and industrial rents was the …
16th November 2021
The IPF Consensus forecasts for euro-zone prime office rental growth in 2021 have been revised up, consistent with the more positive recent data. However, expectations were revised down slightly for the next couple of years. Even so, we still have a more …
15th November 2021
A healthy occupier backdrop and a shortage of supply should allow prime industrial rents in the Netherlands to continue to grow at a steady pace over the coming years. As a result, after years of underperformance, our forecasts leave Dutch rental growth …
11th November 2021
The latest data show that conditions in the German retail sector are improving. Nevertheless, we think vacancy will be slow to reverse as pandemic shifts lead to weakness in in-store demand, particularly in Frankfurt and Munich. Following the pandemic …
8th November 2021
While the latest virus outbreak has clouded the near-term outlook, a tight supply picture and steady employment growth mean that prime Moscow office rents should return to growth in 2022. Preliminary data revealed that, following a collapse in occupier …
4th November 2021
Europeans are returning to cities, though the return to offices has been much slower and this has had negative effects on city retail. Looking ahead, weaker demand for office and retail will weigh on performance in cities with large concentrations of …
2nd November 2021
The Q3 investment data indicate that activity could be slightly stronger this year than we had expected. However, with the economic recovery topping out and structural headwinds limiting investment in the office and retail sectors, we think commercial …
28th October 2021
We expect steady French industrial rental growth over the next few years on the back of a solid economic backdrop and more online shopping. That said, if construction costs and land constraints become more acute, there is a risk that rents climb higher …
25th October 2021
After a fall this year, we expect Warsaw retail rents to return to growth in 2022. That said, the city’s reliance on office workers means that the shift to remote working will weigh on retail spending and keep a lid on rental growth. Following …
21st October 2021
Prime office rental growth in Germany is on track to be stronger than forecast in the near term. However, we think rental growth will slow in the coming years as the supply of modern space is expected to continue to outpace demand, even accounting for a …
20th October 2021
Despite strong demand, we think that high capital values have kept development profitable and have prevented an acceleration in euro-zone prime industrial rental value growth. However, as capital value growth slows there is a risk that some markets will …
15th October 2021
The latest MSCI data show that the wider market has moved roughly in line with our prime data since the onset of the pandemic and provide support to our outlook for property values. The recent release of MSCI’s Pan-European Index for Q2 provides a good …
14th October 2021
We think a greater reliance on foreign capital and tighter monetary conditions will leave CEE investment activity lagging the euro-zone in H2. Overall, transactions are set to end the year 5% lower than their already weak 2020 levels, before catching up …
8th October 2021
The pandemic and widespread use of remote working appeared to entice some Europeans to leave cities last year. However, the recent improvement in city mobility adds evidence to our view that this would prove short-lived, as cities remain attractive for a …
7th October 2021
Rising government bond yields are set to squeeze valuations, resulting in increases in Oslo all-property yields after 2022. This will weigh on returns for Oslo property in the coming years, with structural headwinds limiting the extent to which rental …
30th September 2021
It is an under-statement to say that house prices have weathered the pandemic well; housing markets are positively booming. Yet the drivers of this rise in prices are rather different to those of the pre-2007 housing boom, meaning that we do not seem to …
28th September 2021
The positive near-term economic picture means that Bucharest industrial activity will maintain its momentum in H2, but ease further out as spending patterns normalise. But given the city’s large supply pipeline, we expect industrial rents to barely grow …
27th September 2021
Overview – Our forecast for the economic recovery to maintain its momentum in H2 bodes well for occupier and investment activity. But while we think industrial rental growth will pick up, we still expect office and retail rents to end this year lower. …
24th September 2021
The Evergrande crisis has made waves in financial markets this week. But, while the developed property markets we cover may see some short-term upheaval, we think the impacts outside of China are unlikely to be severe or lasting. For property investors, …
23rd September 2021
Overview – The economic recovery and strong investor demand are supporting the property market upturn in Scandinavia and Switzerland. However, we expect 2021 to mark the peak for returns in most markets, except for Oslo where the start of the monetary …
Overview – While the Delta variant has slowed economic activity in other parts of the world, this has not yet been the case in the euro-zone, and we are cautiously optimistic that the bloc will continue to grow. This will support the property market …
16th September 2021
The most recent commercial property data have been surprisingly upbeat and have raised the possibility that the recovery could be stronger than expected. But we think investors may have run ahead of themselves and this trend is unlikely to be sustained …
