European Commercial Property

Retail yield stabilisation not a sign of a turning point

Following larger-than-expected falls in Q2 and positive near-term developments, we expect prime office and industrial yields to end the year lower than previously forecast. However, we think prime retail yields will trend upwards again as the impact of e-commerce has not yet been fully priced in.
Amy Wood Property Economist
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European Commercial Property Update

ECB rate hike unlikely to move the needle for property

While we now expect the ECB to start its tightening cycle earlier, we don’t think the change is significant enough to prevent further property yield compression over 2022-23, albeit at a slower pace than in 2021.

18 January 2022

European Commercial Property Update

Gradual flexible office recovery underway

Having been hit hard in 2020, improving economic conditions supported flexible office take-up in 2021, albeit caution and consolidation limited the net increase in space. While we expect take-up to remain low compared to the pre-virus period, we think it will improve in 2022, with demand for flexibility and the lower cost of desk space in some markets encouraging a shift towards flexible space.

17 January 2022

European Commercial Property Update

Estimating the carbon transition risk to property values

Real estate potentially has a significant role to play in helping achieve ambitious climate targets. We have estimated the size of the risks in the transition to net zero for the commercial property markets that we cover. This risk varies widely across markets and sectors, but suggests that the costs, at less than 8% of current capital values, are significant but not insurmountable. In view of the wider interest, we are also sending this European Commercial Property Update to clients of our UK and US Commercial Property services.

14 January 2022

More from Amy Wood

European Commercial Property Update

Longer-term prospects poor for Italian offices

With demand slowly recovering and supply being pushed back, we no longer expect prime office rental falls in the Italian markets this year. However, the outlook is less encouraging, with a slowdown in office-based employment growth, more remote working and higher supply expected to weigh on rents.

4 August 2021

European Commercial Property Focus

A primer on European residential property

Less favourable demand fundamentals and less scope for yield compression mean that European residential returns are likely to be lower in the coming years than over the previous decade. An analysis of the relative outlook across selected western European markets suggests that the Netherlands and the UK offer the best prospects.

In view of the wider interest, we are sending this European Commercial Property Focus to clients of our UK Commercial Property service.

27 July 2021

European Commercial Property Update

More competition a risk to flexible office activity

While longer-term drivers are supportive of flexible offices, we think demand for space will be held back by the slow return of workers to the office, by more competition from home offices and by high levels of cheap, vacant traditional space.

20 July 2021
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