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Recent developments add weight to our view that Stockholm office values will rise by more than most other western European markets over the 2021-25 period. However, even in Stockholm, these gains will be much weaker than in recent years. In our latest set …
29th April 2021
The poor near-term economic backdrop means that occupier activity will remain weak this year. But we think that the tightness in supply will prevent office rents from falling and support rental growth beyond this year. The latest data take-up data show …
28th April 2021
With retailers in Belgium set to remain under pressure due to shifts in spending, we think that prime high street rents will extend their falls this year. And with e-commerce remaining a dark cloud over retail, the recovery in rents beyond this year will …
21st April 2021
The expected rebound in economic activity in H2, continued growth in online sales and constrained supply outlook should allow prime industrial rents in the main four markets to return to growth by the end of the year. However, we expect occupiers opting …
20th April 2021
Initial demand indicators support our view of further falls in Dublin office rents this year. And with construction on hold, spill overs from delayed completions could threaten the rental recovery. CBRE data for Q1 showed that weak economic activity and …
14th April 2021
The faster-than-expected timetable to ease virus restrictions, limited supply pipeline in central areas and confirmation that home working has not increased significantly from its pre-virus levels suggest that office vacancy in Copenhagen will peak later …
13th April 2021
Few office or retail markets currently look economically viable for residential conversions. However, expected falls in values, particularly for retail, and acute housing shortages suggest that there is scope for conversions to increase in many markets. …
9th April 2021
After declining in 2021, we think that favourable supply conditions and a rebound in consumer spending will support a recovery in Budapest retail rents into next year. And while the sharp increase in online shopping last year suggests a downside risk to …
8th April 2021
Travel restrictions will hold back cross-border capital flows until at least H2. And given that we expect extra-European capital to return particularly slowly, total investment is set to recover gradually in 2021. With travel restrictions tight for most …
1st April 2021
Despite a more supportive outlook for property valuations, we think that weaker rental prospects will result in southern European property markets continuing to underperform into 2022. Last year we highlighted that southern European property would …
30th March 2021
Overview – Following a year marked with sharp falls in retail rents and rising retail and office yields, the next few months for property values will continue to be dismal. We have pencilled in another drop in all-property capital values this year. With …
26th March 2021
Overview – The Swiss and Scandinavian economies and their property markets are likely to weather the pandemic better than many others in Western Europe. We expect all-property values in the region to hold steady or see small falls this year. However, even …
25th March 2021
Thanks to changing consumption patterns and structural and cyclical knocks to the traditional property sectors, both occupier and investor demand for data centres set new records last year. But, while further strong growth is likely, we don’t expect these …
19th March 2021
Overview – Euro-zone prime property will likely get off more mildly than many expected at the start of the pandemic. We forecast another small fall in all-property capital values this year, with yields holding steady and rental values extending their …
18th March 2021
Given that the natural vacancy rate (NVR) provides a better gauge of office market conditions than the absolute vacancy rate, we set out to estimate the NVR across European office markets. Future market conditions implied by our NVR estimates are broadly …
11th March 2021
With bond and equity dividend yields trending lower, valuations improved in Q4 for offices and retail, while they held steady for industrial. But in Q1, given the recent bond market rout, valuations are likely to deteriorate. (See Chart 1.) That said, the …
8th March 2021
Recent rises in government bond yields do not change our view that office and industrial yields will edge down a bit further in the next year or two. In fact, we don’t expect broad-based upward pressure on property yields until after 2023. Following the …
2nd March 2021
In light of our latest long-term economic and financial market forecasts, we have revisited our views for commercial property performance over the next three decades. We think that average returns will be lower than in the recent past, but that property …
1st March 2021
While virus restrictions have weighed on retail markets across Europe, the hit has been particularly severe in CEE. Indeed, core-CEE prime retail rents fell by an eye-watering 20% last year, the sharpest drop since our series began in 2007. (See Chart 1.) …
23rd February 2021
Office and industrial yields edged lower in Q4 as the recovery in Scandinavian investment took hold. (See Chart 1.) However, the pandemic continued to weigh on occupiers, with retail rents declining further in most markets and office rents taking a hit in …
22nd February 2021
Following the decline in 2020, we think prime office rents in Amsterdam will hold steady this year. But rental growth should pick up thereafter, supported by continued growth in the information and communication sector, comparatively low rents and the …
17th February 2021
Despite the sharp hit to economic activity, euro-zone prime commercial property values were comparatively unscathed last year, falling by just 2%. (See Chart 1.) However, this hides large differences in performance across the sectors. Indeed, industrial …
16th February 2021
We think that prolonged weakness in domestic and foreign spending on prime high streets in Italy will add to pressure on rental affordability, triggering rental falls this year. However, a less significant increase in online penetration during the …
12th February 2021
We think that past movements in Czech bond yields mean that they are less appropriate to use in our valuation calculations. Using alternative bond benchmarks, re-calculated metrics support the view that industrial yields can fall further while office …
11th February 2021
In our Future of Property research, we identified important post-pandemic shifts in most real estate sectors. How these trends interact will be key to the outlook for the urban locations where most real estate is clustered. We think it is premature to …
4th February 2021
Given its significant office supply pipeline, we have revised down our rental forecast for Warsaw offices this year despite a recovery in the labour market. And while we expect rents to pick up in 2022, we think that the shift to remote working will keep …
3rd February 2021
Differences in rental prospects and risk premia confirm our view that, despite looking overvalued compared to government bond yields, there is still scope for larger falls in industrial yields in the German markets compared to most southern European …
1st February 2021
A healthy economic backdrop, favourable supply conditions and the potential for a post-Brexit boost mean that we forecast Dublin industrial rents to keep growing at around 2% p.a. over the coming years. 2020 proved to be yet another solid year for …
28th January 2021
Although much of 2020’s fall in Norwegian government bond yields has been reversed, we think that improving economic activity and supportive valuations will allow prime office yields to reach new historic lows this year. Despite the hit to economic …
25th January 2021
Despite the softness in occupier activity, prime office rents in the French capital grew at a healthy pace in 2020. And with the labour market set to recover in the second half of this year and a tight supply picture, we think that Paris rental growth has …
21st January 2021
Although rental growth prospects for prime property are weak compared to recent years, the outlook is better than for secondary property. As such, we think that investors will continue to focus on prime assets this year, allowing prime office and …
18th January 2021
Recent movements in the REIT market add weight to our view that structural factors, rather than cyclical ones, will determine the outlook for property markets over the coming years. In turn, irrespective of a successful vaccine rollout, the recovery in …
14th January 2021
Our forecast is for a cumulative fall in Spanish prime office rents over the next two years. But we think this view is justified as occupier demand is likely to improve only gradually, meaning space released to the market won’t be fully absorbed. In fact, …
11th January 2021
Despite a brighter economic outlook later in 2021, many of the factors that weighed on investment activity last year are set to persist. In turn, following a likely 20% fall in European (excluding UK) investment in 2020, we think the recovery this year is …
7th January 2021
Although the rollout of effective vaccines should allow economic activity to rebound in the second half of the year, we do not think that European property markets will bounce back quickly. This Update outlines four key developments to watch out for in …
6th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
5th January 2021
The recent re-introduction of weekend curfews and the announced four-day new year lockdown suggest that the struggles of the retail sector will continue into 2021. And despite the improving outlook for consumer spending and tourism, we think that weakness …
22nd December 2020
Overview – While vaccine developments have improved the economic outlook for the latter half of next year, the near-term weakness in economic activity means that property values will remain under pressure over the coming quarters. But even once occupier …
18th December 2020
Overview – The positive news on the vaccine has improved the economic outlook and should allow output in the Swiss and Scandinavian economies to recover to their pre-virus levels in late 2021. This will support the rental recovery. However, structural …
17th December 2020
Overview – Although the near-term economic outlook remains weak, vaccine developments pave the way for a rebound in mid-2021. However, we think that the rental recovery in property markets will be more gradual. This reflects that structural headwinds …
10th December 2020
A weaker CEE rental outlook, coupled with tighter policy and investors’ reassessment of the sector, suggest that the recent widening between CEE and euro-zone office yields has further to go. As the severity of the pandemic became clear, we argued that …
3rd December 2020
News about a vaccine has boosted financial markets and we have revised up our global economic expectations for the next two years or so. But while we think that this bodes well for the medium term, next year is still likely to be tough for most property …
2nd December 2020
Falls in alternative asset yields in Q3 meant valuations continued to improve for offices and retail, while they held steady for industrial. (See Chart 1.) And the backdrop is supportive of property valuations in the coming quarters. Indeed, government …
30th November 2020
Economic and property data for Q3 confirmed Switzerland and Scandinavia’s relative resilience in this pandemic. In fact, Scandinavian capital value growth improved across all sectors on an annual basis, albeit values continued to fall for retail. (See …
24th November 2020
Data for Q3 confirmed that while some office and industrial markets in the region recorded quarterly rental falls, weakness was still unsurprisingly concentrated in the retail sector. Core-CEE retail rents have now fallen by 15% so far this year, far …
23rd November 2020
Virus-driven behaviour changes that support a faster online transition will boost industrial demand over the coming years. But we don’t believe the view that higher online spending will cause rents to detach permanently from the underlying strength of the …
19th November 2020
Moscow offices rents were under pressure even before the onset of COVID-19 and a further steep decline is expected this year. Domestic economic factors will be more supportive in 2021, but this is unlikely to deliver much more than marginal growth over …
17th November 2020
Third quarter data make it look increasingly likely that our year-end price forecasts will prove to be too negative. However, with the UK still on course for a capital value fall of close to 10% this year, this doesn’t necessarily mean that the US or …
12th November 2020
The industrial sector aside, investment activity and occupier demand failed to recover from sharp Q2 falls in Q3, even as lockdown measures were eased. Indeed, in the retail sector, the fall in prime rents gathered pace and yields edged up. In sharp …
German occupier demand has slumped in the pandemic, though rents have generally held steady so far this year. But with demand likely to remain weak and an overhang of supply in some markets, declines are still likely over the next 12 months or so. Our …
6th November 2020
