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European Commercial Property

European Commercial Property Update

European Commercial Property Update

Homeworking to remain key to city retail performance

One of the unforeseen consequences of the homeworking revolution is its negative impact on city centre retail footfall. The evidence suggests that in urban centres there is a link between higher levels of remote work and poorer retail performance, which we think is likely to persist. In view of the wider interest, we are also sending this European Commercial Property Update to clients of our UK Commercial Property Service. Property Drop-In (19th May): What will rising interest rates mean for commercial property returns in the US, UK and Europe? Join our 20-minute briefing on the outlook for returns on Thursday. Register now.

13 May 2022

European Commercial Property Update

Italian capital values to take a hit

Italian prime property values continued to make solid gains in Q1. However, with the economic outlook downgraded and larger increases in property yields expected over the next couple of years, capital value growth is set to slow sharply and by more than in other euro-zone markets. Markets Drop-In (11th May, 10:00 EDT/15:00 BST): We’re discussing our Q2 Outlook reports and what they say about the potential performance of bonds, equities and FX rates as inflation peaks in a special 20-minute briefing on Wednesday. Register now.

11 May 2022

European Commercial Property Update

Higher rates to squeeze Copenhagen office values

With economic concerns worsening in the euro-zone, we expect that the Danish economy will not be immune. And we think that the shifts in the interest rate outlook in particular will have the most significant impact on Copenhagen office performance. UK Housing Drop-In (10th May 10:00 BST/17:00 SGT): Economists from our property team are hosting a 20-minute briefing to explain why we think UK house prices are heading for a fall – and how bad the fallout will be. Register now.

5 May 2022
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European Commercial Property Update

Office yields most vulnerable to rising interest rates

While the low level of prime industrial yields compared to history leaves the sector vulnerable to rising interest rates, a fair value analysis that incorporates our expectations for rental growth suggests that office yields could come under more upward pressure in the next few years.

European Commercial Property Update

War impact reinforces investment slowdown

While Q1 investment data showed further strength, the impact of the war in Ukraine on investor sentiment, economic growth and interest rates support our view that pan-European (excl. UK) investment activity will slow further ahead.

European Commercial Property Update

Euro-zone property yields to rise sooner

A weaker economic outlook and larger increases in interest rates this year and next mean that we now think euro-zone all-property yields will reach their trough by the end of this year and will come under more upward pressure than previously expected.

European Commercial Property Update

Completion delays prolong Budapest office market dip

Past delays in development projects mean that office completions will exceed demand in Budapest this year and next. As such, having held broadly steady in 2021, office vacancy is set to rise again and put downward pressure on rents over the next couple of years.

European Commercial Property Update

There is still likely to be a reckoning for offices

We think the recent upturn in office market performance is largely down to the one-off release of pent-up demand and remain downbeat about future prospects. With occupancy still languishing and remote working firmly established, we think that the risks to office vacancy and rents have not passed yet. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of all our Commercial Property Services.

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