European Commercial Property
...

European Commercial Property

European Commercial Property Focus

European Commercial Property Focus

Estimating the natural vacancy rate in European offices

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 in line with our rental growth forecasts for the next five years. But given the limitations of the NVR, we think that it is unlikely to become a fundamental part of our forecasting process.

11 March 2021

European Commercial Property Focus

Higher online share to boost logistics demand by 15%

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 economy. And since we don’t expect to see the sort of supply shortages that plagued the UK market in recent years,…

19 November 2020

European Commercial Property Focus

Is COVID-19 the death-knell for physical retail?

Retail has been hit hard by the COVID-19 crisis and lasting changes to online spending will bring further pain. While our estimates suggest that the impact is likely to be less severe than structural change in offices, the rental outlook is expected to remain weak and a faster online transition will reinforce this. In the longer term, we expect the sector will continue to underperform, though how much will vary between markets and will be driven by both online migration and other market conditions. Overall, the UK is most exposed, along with a few European markets, while the US may also be vulnerable later in the decade.

8 October 2020
More Publications

European Commercial Property Focus

Remote working poses significant downside to rents

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 have a larger impact on demand for space in the German and Italian markets than in Spain or France, where the outlook for office-based employment is stronger. Even so, across all these markets our estimates suggest that, beyond the immediate hit from COVID, prime office rents will continue to fall in the coming years. This poses a significant risk to our current forecast that rents will start to recover in 2021.

European Commercial Property Focus

The outlook for housing in a post-COVID world

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 will have brought forward a planned move, and changes in relative prices will rebalance demand. With…

European Commercial Property Focus

Remote working to hit office income by 20-25%

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 substantial conversions and demolitions, we expect vacancy to rise markedly in the next five years and still…

6 August 2020

European Commercial Property Focus

Lasting blow to supply capacity is not inevitable

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 revert to the path of output they were on before the crisis. Nonetheless, with demand likely to be slow to recover fully, this could still take several years. And there will be several important exceptions to this generally optimistic picture.

European Commercial Property Focus

Which retail markets are most exposed to COVID-19?

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.

1 to 8 of 16 publications
See More ↓