Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
Overview – Investment activity and rents have felt the impact of the virus, with the retail sector bearing the brunt. Indeed, after falling by around 2% this year, we think that Scandinavian retail rents will end 2020 4% lower than in 2019. And with …
28th September 2020
Overview – While economic growth is expected to continue to recover over the second half of the year, albeit at a slower pace than initially post-lockdown, it won’t be the end of falls in Emerging European property values. The sharp decline in retail …
25th September 2020
Overview – As widely expected, Q2 brought a range of disappointing data, from plunging investment volumes to further falls in retail rents. And while property values outside of retail have generally held up so far, fragile occupier demand and rising …
18th September 2020
As we have argued in our Global Property Focus , we think that some of the increase in remote working seen this year will become a permanent feature of working practices in office-based sectors in the coming years. In Europe, we estimate that this will …
14th September 2020
The falls recorded so far, most notably in the CEE region, coupled with our view that the initial recovery in retail sales in Europe has started to run out of steam, has prompted us to downgrade our prime retail rental forecasts for the euro-zone and CEE. …
10th September 2020
Even after the immediate threat of COVID has receded, we expect as many as 50% of office-based employees will work from home at least once a week. But the move away from cities and toward the suburbs should prove short-lived. Most of those leaving cities …
9th September 2020
The reversal in equity dividend yields following the virus-related market rout in March lead to a broad-based improvement in property valuations. (See Chart 1.) Coupled with central banks’ assurances that policy will remain accommodative for some time to …
3rd September 2020
Although the Norwegian economy is set to contract less sharply than most of Europe this year, the fact that weakness in occupier demand has occurred alongside a large boost to supply means that Oslo prime office rents will decline by a greater extent than …
2nd September 2020
Q2 data was a mixed bag as all markets recorded shifts in yields while only a handful of markets saw moves in rents. That said, Scandinavian investment activity took a significant hit in Q2, and despite the pick-up in June and July, transactions look set …
24th August 2020
Consistent with the sharp fall in economic activity, occupier demand weakened further in Q2. And with bargaining power shifting to the tenant, rental falls were also evident in many markets, with the sharpest declines recorded in the retail sector. (See …
20th August 2020
Investment and occupier demand plunged further in Q2. As expected, the retail sector bore the brunt of the impact, with capital values falling by almost 9% y/y. This drove down all-property capital value growth to just 3% y/y, the lowest since 2012 Q4. …
19th August 2020
With accommodative monetary policy anchoring bond yields, we think that yield compression in the euro-zone is set to resume next year. But the balance of risks have clearly changed post-virus. Yield rises in the face of the COVID-19 shock were inevitable. …
13th August 2020
Despite sharply lower investment in Q2, solid Q1 activity and the faster-than-expected economic recovery means we now think that total pan-Europe (ex UK) investment in 2020 will be only around 15% lower than its 2019 level. The disruption from the virus …
12th August 2020
We think that the enforced remote-working experiment of recent months will cause a dramatic demand shift in the office sector, with as many as 50% of office-based employees working from home at least once a week. Even with a heroic supply response through …
6th August 2020
Although demand for Romanian industrial space held up in H1, we expect it to weaken over the rest of the year as consumer demand falters and the economy recovers only slowly. Combined with incentives rising and the significant increase in supply in recent …
5th August 2020
We expect office-based employment growth to be faster than total employment growth by around 0.3-0.5% ppts each year over the next decade in the US, the UK and the euro-zone. The coronavirus crisis will dampen the outlook in the short run, but the less …
4th August 2020
A more favourable economic outlook should support occupier demand and thereby prime Dutch office rents over the next few years. And while the shift to more remote working poses a risk, we think that the Netherlands might be better placed to deal with the …
31st July 2020
The outlook for the Polish economy is better than in much of Europe. However, we still expect retail rents to end the year lower than in 2019, with the recent rebound in retail spending unlikely to be sustained. Despite the Polish economy holding up …
30th July 2020
Although banks expect to tighten lending standards, we think that the underlying situation is much better than pre-GFC and that government schemes will continue to provide support, which should limit financial strains for European property owners. Given …
23rd July 2020
Despite the deterioration in the rental outlook, attractive property valuations justify investor interest in Portugal, especially compared with its southern European peers. CBRE data confirmed that investment in Europe was hit hard in Q2 because of the …
22nd July 2020
Despite the apparent strength of the euro-zone labour market in early Q2 data and the office sector’s inherent resilience, we still expect prime rents to fall this year on the back of the weak economy and uncertainty surrounding the virus. With …
16th July 2020
Global property markets are expected to see a lasting impact from the effects of the COVID-19 outbreak. Over the coming weeks, we will publish a series of pieces looking at the post-pandemic future across the main property types. We start this by …
15th July 2020
The fact that there were signs of improvement in Scandinavian transactions in June provides some hope for the rest of Europe. But overall, commercial property investment will still face an uphill battle as uncertainty lingers and economic activity remains …
8th July 2020
The Swiss labour market is expected to hold up comparatively well this year which would normally bode well for occupier demand. But we expect a shift in bargaining power in favour of the tenant and competition from new supply to contribute to rental …
7th July 2020
While the quicker than anticipated pick-up in high frequency data has meant that the fall in Greek economic activity is likely smaller than initially feared, retail rents are still set to drop sharply this year. The following recovery in Greek rents will …
3rd July 2020
The hit to the luxury retail market and prolonged weakness in international tourism will cause Paris prime retail rents to decline this year for the first time since 2009. Although some rental recovery is expected next year, the virus outbreak has …
2nd July 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
Overview – While property values have so far been slow in responding to the virus-related fallout, economic indicators suggest that occupier demand took a hit in Q2. As a result, we think that it is only a matter of time for a repricing of property, with …
26th June 2020
Overview – The sharp reduction in economic activity over the first half of the year and prolonged uncertainty have negatively impacted investment activity and occupier demand. We expect this will flow through to rental falls and higher yields this year, …
Overview – Thin deal evidence and market uncertainty has meant that the disruption from the virus has been slow to feed through to property values. However, significant falls in economic activity in H1 and continued uncertainty about the outlook have …
19th June 2020
Even though working from home has meant business as usual for many office occupiers, weak activity elsewhere has still caused euro-zone office output to fall. With the economic recovery expected to be gradual, these linkages to the wider economy will …
11th June 2020
Timely activity indicators suggest that the Scandinavian economies are already on the gradual path to normality, which will provide support to occupier demand and, in turn, prime office rents this year. Scandinavian economies appear to be holding up …
10th June 2020
The broad-based jump in equity dividend yields following the virus-driven collapse in equity prices meant that property valuations deteriorated in Q1. (See Chart 1.) This impact was exacerbated in southern Europe, as well as Russia and Turkey, where the …
4th June 2020
Markets that are most reliant on international capital will inevitably bear the brunt of the collapse in cross-border flows as investors remain very cautious in the face of COVID-19-related uncertainty. But the relative stability and liquidity of the core …
2nd June 2020
Much like the rest of Europe, shifts in prime rents and yields in CEE were relatively muted in Q1. The lack of movement was mainly due to thin deal evidence and market uncertainty. But looking ahead, given that the worst hit to economic activity from the …
28th May 2020
Despite the contraction in economic activity in Q1, property values in Scandinavia and Switzerland held broadly steady. However, in a large part this reflected uncertainty and low deal flow, which meant that it was not possible for agents to provide a …
27th May 2020
Prime euro-zone rents and yields held broadly steady in Q1, with many agents noting it was not possible to provide a robust reassessment of values. This marked the end of period of positive rental growth and yield declines in many markets. Indeed, there …
20th May 2020
Despite a large share of Milan prime space being pre-let this year, we think that a sharp drop in net absorption will result in prime office rent declines. And we don’t expect rental growth to bounce back, which is consistent with the slow expected …
18th May 2020
Before the virus outbreak, falls in prime retail rents were expected to be concentrated in Northern European markets. Now rental falls are likely to spread throughout Southern and Central Eastern Europe as well. The impact of the virus outbreak is highly …
14th May 2020
Data from Europe suggest that the relationship between working from home and office space per worker is weak. And even if working from home becomes more prevalent in the next few years, we think that the most important driver of occupier demand will be …
11th May 2020
The lack of clear movement in the Q1 commercial property data has put other indicators into focus. These paint a much bleaker picture, particularly for the retail sector. The key Q1 commercial property data have so far held up well. Indeed, prime rents in …
7th May 2020
In light of the pandemic, our forecasts for developed market commercial property returns have been revised lower. Nevertheless, the relativities between the key markets are broadly unchanged, meaning that we still expect the US to outperform the UK and …
6th May 2020
As Germany cautiously eases its lockdown, despite the significant hit to economic activity, the tight supply picture should help support prime office rents across the four main cities this year. Preliminary data for Q1 showed that office take-up across …
1st May 2020
Despite reasonable levels of capital ready to invest and an expected loosening in credit conditions, the sharp deterioration in investor sentiment reinforces our view that euro-zone investment activity will drop by around 40% over the rest of this year. …
30th April 2020
We think that, for the industrial sector, any short-term gain from an increase in online shopping will be outweighed by the plunge in demand and subsequent collapse in global trade. While the industrial sector appears to be more insulated from …
24th April 2020
The uneven economic impact of the coronavirus disruption suggests that property values in Southern European markets will be hit hardest and may take longer to recover than elsewhere in the euro-zone. The data for the first quarter has started trickling …
23rd April 2020
Although retailers in Sweden remain open, early indications suggest that the Stockholm retail sector will still be hit hard in Q2. In fact, we think that the virus outbreak will only accelerate falls in retail rents already expected as a result of the …
16th April 2020
While COVID-19 has forced consumers in southern Europe to shop online, we think that e-commerce penetration will remain lower for structural reasons, which is one reason why prime retail rents in these markets will be more resilient in the long-term. …
14th April 2020
Although property valuations and rental prospects remain supportive, the higher risk premium associated with CEE markets means that property yields are likely to increase more in the near term and to unwind more slowly than in Western European markets. In …
8th April 2020
While COVID-19 related delays to construction might reduce supply in some markets, we think that the drop in occupier demand will far outweigh any potential benefits to rents. The euro-zone headline construction PMI for March, revealed that the index fell …
7th April 2020
