Over the past few months we have seen little reason to alter in either direction our euro-zone commercial property forecasts. With no resolution in sight to the region’s debt crisis, we think that all member states will slip back into recession in 2012 and/or 2013, with negative ramifications for occupier demand and rental values everywhere. Lower expectations for rental growth, together with a general shift down the risk curve, will put upwards pressure on property yields. Thus falling capital values look set to be a major drag on total returns which, on average over the next two years, we expect to be negative in all euro-zone property markets.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services