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With more hybrid working post-pandemic, the view is that office rents will be under pressure for many years. This raises questions about which locations could be more resilient and if rents in central business districts (CBDs) will perform better than …
8th September 2021
Weak near-term rental prospects and squeezed valuations mean that we expect Swiss office returns to perform poorly in the coming years, particularly in Zurich. Swiss office values have been more resilient to the pandemic than we had first expected. Having …
6th September 2021
The valuation of industrial and offices deteriorated compared to bonds and equities in Q2 on account of falls in property yields. Meanwhile, retail yields stabilised, leaving valuations broadly unchanged. (See Chart 1.) With government bond yields set to …
2nd September 2021
We expect a recovery in domestic and foreign spending along with online penetration rates below most other euro-zone markets to support moderate growth in Spanish prime retail rents over the 2022-25 period, though this is not enough to reverse the decline …
31st August 2021
Data for Q2 confirm that, as with the economic recovery, the property upturn is more advanced in Scandinavia than in western Europe. Investment activity grew strongly, even when excluding a large one-off deal. (See Chart 1.) Prime all-property capital …
25th August 2021
In line with the economic recovery, there were growing signs that property markets have turned a corner in Q2. All-property rents rose on the quarter, while the all-property yield dipped on the back of lower industrial yields. On an annual basis, …
24th August 2021
All-property capital values rose for the third consecutive quarter in Q2, leaving them less than 1% below their pre-virus level. The improvement was driven by a decline in all-property yields, though rents also rose slightly on a quarterly basis for the …
18th August 2021
We expect prime retail rents in both Lyon and Paris to struggle to make up lost ground this year, and even after a return to growth next year, the pace of increases will be subdued. After falling by 15% y/y last year, prime retail rents in Paris edged …
16th August 2021
Following larger-than-expected falls in Q2 and positive near-term developments, we expect prime office and industrial yields to end the year lower than previously forecast. However, we think prime retail yields will trend upwards again as the impact of …
11th August 2021
Cities are central to property performance. And the largest are seen as hugely important by investors. But the pandemic has turned many received ideas about real estate on their head and we think that performance in gateway markets will remain relatively …
10th August 2021
Following better-than-expected Q2 data, we have revised up our Helsinki office returns forecasts for this year. And given a robust rental outlook, returns are set to outpace the euro-zone over the next few years. After a fall of nearly 4% last year, 2021 …
6th August 2021
With demand slowly recovering and supply being pushed back, we no longer expect prime office rental falls in the Italian markets this year. However, the outlook is less encouraging, with a slowdown in office-based employment growth, more remote working …
4th August 2021
The Q2 data showed that pan-European (excl. UK) transactions improved after their Q1 lows. But international travel restrictions, structural shifts in the office and retail sectors and tougher credit conditions mean that the recovery in investment …
29th July 2021
Less favourable demand fundamentals and less scope for yield compression mean that European residential returns are likely to be lower in the coming years than over the previous decade. An analysis of the relative outlook across selected western European …
27th July 2021
More remote working is pushing all occupiers to reassess their office space, but we think that rental growth for prime offices in Brussels should hold up better than the wider market. Following a strong start to the year, the recovery in occupier activity …
22nd July 2021
While longer-term drivers are supportive of flexible offices, we think demand for space will be held back by the slow return of workers to the office, by more competition from home offices and by high levels of cheap, vacant traditional space. A year ago, …
20th July 2021
The slow economic recovery, more remote working and a high supply pipeline are key reasons for our below-consensus forecasts for prime office rental growth in Lisbon in the coming years. As highlighted in a recent Update , we expect weaker growth in …
16th July 2021
With price pressures in the construction sector likely to prove transitory, we think that the hit to activity will be small. That said, we expect construction activity to slow over the coming years on account of lower office completions as the sector …
14th July 2021
Despite poor employment prospects, we are cautiously optimistic on the outlook for CEE leasing activity as the economic recovery gets underway. However, large supply pipelines mean that improving occupier demand will not be enough to prevent further …
8th July 2021
After gaining ground since 2018, the recovery in Athens’ prime property values has stalled. However, we think that the catch up with the euro-zone will continue, albeit at a slower pace than in recent years. Athens’ prime property values have recovered …
6th July 2021
Lingering restrictions on travel mean that weakness in foreign tourist spending will continue to weigh on retailers’ incomes in tourist-dependent retail markets this year. This supports our view that prime retail rents will fall, even as the domestic …
1st July 2021
Tighter supply conditions and the expected smaller hit from the shift to remote working mean that we think Paris office rents will continue to outperform Lyon over the next five years. Prior to the pandemic, Lyon prime office rental growth had outpaced …
30th June 2021
Overview – With virus restrictions set to be eased further, we expect the recovery in economic activity to gather pace from Q3, which should give occupier markets a lift. But the pick-up will not be enough to prevent falls in office and retail rents this …
25th June 2021
Overview – With the recovery in economic activity already underway and further easing in virus restrictions to come, the outlook for occupier demand is encouraging. However, with structural factors also at play, this is likely to provide more support to …
24th June 2021
Overview – The easing of virus restrictions has brightened the economic outlook and prospects for occupier markets. And with rises in inflation expected to be temporary, we think monetary policy will remain highly accommodative over the next five years, …
18th June 2021
Recent strong inflation data have heightened concerns about global price pressures. At present, we think there will be limited impact on short-term property performance. Further out though, higher inflation expectations reinforce the view that bond yields …
16th June 2021
With emission targets needing to be met by 2030, the race is on for the real estate sector to decarbonise. By forcing tenants and landlords to share the risks, benefits and costs of environmental policies, green commercial leases are a promising tool, and …
10th June 2021
Our expectation for more aggressive monetary tightening in Central and Eastern Europe (CEE) and the subsequent upward pressure on bond yields mean that we now expect property yields to rise by more from 2023. With inflation in the region running hot and …
7th June 2021
T he latest IPF Consensus forecasts are consistent with our view that prime office rents will fall this year and the recovery in 2022 will be weak, even as the easing of virus restrictions allows economic activity to rebound. However, outside of Emerging …
3rd June 2021
The marked rise in government bond yields drove a deterioration in property valuations in Q1, particularly in industrial markets where property yields also fell steeply. (See Chart 1.) And with government bond yields edging up further in Q2, valuations …
2nd June 2021
Capital value growth improved in Scandinavia and Switzerland in Q1, helped by the easing of virus restrictions and by the improvement in economic activity towards the end of the quarter. The uptick in the pace of Scandinavian industrial capital value …
28th May 2021
The fall in all-property rents, dragged down by office and retail sectors, meant that annual capital value growth remained in negative territory in Q1, despite the surprise fall in yields. (See Chart 1.) Looking ahead, while the faster pace of the …
26th May 2021
With the faster pace of vaccination paving the way for a rebound in economic activity, the prospects for occupier markets have improved. However, structural changes mean that the recovery in the office and retail sectors will be gradual. In contrast, we …
20th May 2021
Last year, rents held up better in Barcelona’s CBD, and we expect this trend to continue this year. That said, higher rents in the CBD mean that they are also likely to be hit harder from the shift to remote working and associated reductions in office …
13th May 2021
As the recovery in occupier demand gets underway, we think that the low amounts of vacant modern space, limited supply pipeline and comparatively cheap rents will mean that prime office rental growth in Hamburg outperforms the other main German markets in …
11th May 2021
Following stronger than expected Q1 data, we have revised up our rental forecast for 2021. And Prague’s low costs and constrained supply means that we think rental growth has further to go this year. Following an increase of 0.5% last year, we had …
6th May 2021
More working from home will inevitably change cities as we know them. However, cities are more than just workers. This means that cities where a higher share of jobs can be done remotely are not necessarily the ones where the impact of remote working on …
5th May 2021
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
