European Commercial Property
...

Near-term upgrades to German office rental growth

Prime office rental growth in Germany is on track to be stronger than forecast in the near term. However, we think rental growth will slow in the coming years as the supply of modern space is expected to continue to outpace demand, even accounting for a shift in occupier preferences towards prime space.
Amy Wood Property Economist
Continue reading

More from European Commercial Property

Non-euro European Commercial Property Chart Book

Scandinavia & Switzerland: Values to rise further

The rebound in economic activity and robust investor demand paved the way for a continued improvement in Scandinavian and Swiss property markets in Q3. Office and industrial values rose further, as strong competition pushed down yields. Retail yields also fell in Stockholm. But we think its too soon to call a turning point for retail. Indeed, retail rents also fell, indicating that conditions in the sector are still weak. Nevertheless, the better outlook for the other sectors means we think that all-property values will rise further. That said, with economic growth expected to slow in the coming months and structural shifts weighing on retail and office sectors, the pace of improvement is likely to moderate.

23 November 2021

Non-euro European Commercial Property Chart Book

Emerging Europe: More positive on near-term pricing

CEE property values completed the final leg of their recovery in Q3, fully reversing the nearly 5.5% peak-to-trough drop in 2020. With rents barely moving on the quarter, falls in yields did all the heavy lifting in driving capital values higher. CEE yields across all sectors have now dropped back since the start of the year, with the decline in retail yields a notable exception in Europe. Therefore, in contrast to our forecast in our last Outlook, we no longer expect office and retail yields to end the year higher. And with both office and retail rents expected to return to growth next year, there is a risk to our forecasts that yields could fall further. That said, given the cooling economic recovery and structural shifts from e-commerce and remote working, the rebound in rents will be modest at best. Moreover, after 2022, rising property yields on the back of higher bond yields mean that the next few quarters are likely to be as good as it gets for property values.

22 November 2021

Euro-zone Commercial Property Chart Book

Rental recovery picks up pace

The recovery in euro-zone commercial property values picked up in Q3, supported by a small fall in yields and an improvement in the pace of rental growth. While retail rents held steady, the quarterly rise in both office and industrial rents was the largest since 2019 Q4. Demand for prime assets and low interest rates will continue to support the property sector. However, with economic activity expected to slow over the next six months or so, and the outlook for the retail and office sectors still clouded by structural change, we think that the property recovery will struggle to maintain its current pace.

16 November 2021

More from Amy Wood

European Commercial Property Update

Why are prime industrial rental values not taking off?

Despite strong demand, we think that high capital values have kept development profitable and have prevented an acceleration in euro-zone prime industrial rental value growth. However, as capital value growth slows there is a risk that some markets will see more upward pressure on rents.

15 October 2021

European Commercial Property Update

Did Europeans leave cities (and have they returned)?

The pandemic and widespread use of remote working appeared to entice some Europeans to leave cities last year. However, the recent improvement in city mobility adds evidence to our view that this would prove short-lived, as cities remain attractive for a range of reasons other than just the proximity to work.

7 October 2021

European Commercial Property Update

Oslo property returns have peaked

Rising government bond yields are set to squeeze valuations, resulting in increases in Oslo all-property yields after 2022. This will weigh on returns for Oslo property in the coming years, with structural headwinds limiting the extent to which rental growth can provide an offset.

30 September 2021
↑ Back to top