Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
Despite the apparent strength of the euro-zone labour market in early Q2 data and the office sector’s inherent resilience, we still expect prime rents to fall this year on the back of the weak economy and uncertainty surrounding the virus. With …
16th July 2020
Global property markets are expected to see a lasting impact from the effects of the COVID-19 outbreak. Over the coming weeks, we will publish a series of pieces looking at the post-pandemic future across the main property types. We start this by …
15th July 2020
The fact that there were signs of improvement in Scandinavian transactions in June provides some hope for the rest of Europe. But overall, commercial property investment will still face an uphill battle as uncertainty lingers and economic activity remains …
8th July 2020
The Swiss labour market is expected to hold up comparatively well this year which would normally bode well for occupier demand. But we expect a shift in bargaining power in favour of the tenant and competition from new supply to contribute to rental …
7th July 2020
While the quicker than anticipated pick-up in high frequency data has meant that the fall in Greek economic activity is likely smaller than initially feared, retail rents are still set to drop sharply this year. The following recovery in Greek rents will …
3rd July 2020
The hit to the luxury retail market and prolonged weakness in international tourism will cause Paris prime retail rents to decline this year for the first time since 2009. Although some rental recovery is expected next year, the virus outbreak has …
2nd July 2020
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 …
29th June 2020
Overview – While property values have so far been slow in responding to the virus-related fallout, economic indicators suggest that occupier demand took a hit in Q2. As a result, we think that it is only a matter of time for a repricing of property, with …
26th June 2020
Overview – The sharp reduction in economic activity over the first half of the year and prolonged uncertainty have negatively impacted investment activity and occupier demand. We expect this will flow through to rental falls and higher yields this year, …
Overview – Thin deal evidence and market uncertainty has meant that the disruption from the virus has been slow to feed through to property values. However, significant falls in economic activity in H1 and continued uncertainty about the outlook have …
19th June 2020
Even though working from home has meant business as usual for many office occupiers, weak activity elsewhere has still caused euro-zone office output to fall. With the economic recovery expected to be gradual, these linkages to the wider economy will …
11th June 2020
Timely activity indicators suggest that the Scandinavian economies are already on the gradual path to normality, which will provide support to occupier demand and, in turn, prime office rents this year. Scandinavian economies appear to be holding up …
10th June 2020
The broad-based jump in equity dividend yields following the virus-driven collapse in equity prices meant that property valuations deteriorated in Q1. (See Chart 1.) This impact was exacerbated in southern Europe, as well as Russia and Turkey, where the …
4th June 2020
Markets that are most reliant on international capital will inevitably bear the brunt of the collapse in cross-border flows as investors remain very cautious in the face of COVID-19-related uncertainty. But the relative stability and liquidity of the core …
2nd June 2020
Much like the rest of Europe, shifts in prime rents and yields in CEE were relatively muted in Q1. The lack of movement was mainly due to thin deal evidence and market uncertainty. But looking ahead, given that the worst hit to economic activity from the …
28th May 2020
Despite the contraction in economic activity in Q1, property values in Scandinavia and Switzerland held broadly steady. However, in a large part this reflected uncertainty and low deal flow, which meant that it was not possible for agents to provide a …
27th May 2020
Prime euro-zone rents and yields held broadly steady in Q1, with many agents noting it was not possible to provide a robust reassessment of values. This marked the end of period of positive rental growth and yield declines in many markets. Indeed, there …
20th May 2020
Despite a large share of Milan prime space being pre-let this year, we think that a sharp drop in net absorption will result in prime office rent declines. And we don’t expect rental growth to bounce back, which is consistent with the slow expected …
18th May 2020
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. The impact of the virus outbreak is highly …
14th May 2020
Data from Europe suggest that the relationship between working from home and office space per worker is weak. And even if working from home becomes more prevalent in the next few years, we think that the most important driver of occupier demand will be …
11th May 2020
The lack of clear movement in the Q1 commercial property data has put other indicators into focus. These paint a much bleaker picture, particularly for the retail sector. The key Q1 commercial property data have so far held up well. Indeed, prime rents in …
7th May 2020
In light of the pandemic, our forecasts for developed market commercial property returns have been revised lower. Nevertheless, the relativities between the key markets are broadly unchanged, meaning that we still expect the US to outperform the UK and …
6th May 2020
As Germany cautiously eases its lockdown, despite the significant hit to economic activity, the tight supply picture should help support prime office rents across the four main cities this year. Preliminary data for Q1 showed that office take-up across …
1st May 2020
Despite reasonable levels of capital ready to invest and an expected loosening in credit conditions, the sharp deterioration in investor sentiment reinforces our view that euro-zone investment activity will drop by around 40% over the rest of this year. …
30th April 2020
We think that, for the industrial sector, any short-term gain from an increase in online shopping will be outweighed by the plunge in demand and subsequent collapse in global trade. While the industrial sector appears to be more insulated from …
24th April 2020
The uneven economic impact of the coronavirus disruption suggests that property values in Southern European markets will be hit hardest and may take longer to recover than elsewhere in the euro-zone. The data for the first quarter has started trickling …
23rd April 2020
Although retailers in Sweden remain open, early indications suggest that the Stockholm retail sector will still be hit hard in Q2. In fact, we think that the virus outbreak will only accelerate falls in retail rents already expected as a result of the …
16th April 2020
While COVID-19 has forced consumers in southern Europe to shop online, we think that e-commerce penetration will remain lower for structural reasons, which is one reason why prime retail rents in these markets will be more resilient in the long-term. …
14th April 2020
Although property valuations and rental prospects remain supportive, the higher risk premium associated with CEE markets means that property yields are likely to increase more in the near term and to unwind more slowly than in Western European markets. In …
8th April 2020
While COVID-19 related delays to construction might reduce supply in some markets, we think that the drop in occupier demand will far outweigh any potential benefits to rents. The euro-zone headline construction PMI for March, revealed that the index fell …
7th April 2020
While COVID-19 will hit co-working hard, given the relative size of this subsector, we don’t think it will be large enough to impact rents in the overall office sector. WeWork has been gracing headlines again this past week as the co-working firm is …
2nd April 2020
The past relationship suggests that the recent 10% to 50% fall in real estate equity prices provide an indication of the direction values will move in the direct market, but not the likely extent of the falls. Over the past month, real estate equity …
1st April 2020
Overview – Given the uncertainty surrounding the impact of COVID-19 on the economy, the hit to real estate markets is still uncertain. The drop in economic output expected in the first half of this year, along with deteriorating investor sentiment will …
27th March 2020
Overview – The fast-moving pace of developments means that the impact of COVID-19 on Emerging European real estate is highly uncertain. We expect the sharp decline in economic activity and deterioration in sentiment to weigh on rental values and cause …
Property has generally been at the centre of the most severe economic downturns in recent decades. But this time it is different. Although we think the commercial market is likely to experience a sharp jolt in 2020, provided the spread of the virus can be …
26th March 2020
Overview – The ever-changing economic effects of COVID-19 mean that the impact on real estate markets is highly uncertain. It is clear that the sharp contraction in economic activity and deterioration in sentiment over the first half of the year will …
20th March 2020
Further falls in yields coupled with robust, albeit slowing, rental growth point to Helsinki offices outperforming the rest of the euro-zone and its Nordic peers for total returns. Commercial property investment in Finland started the year on strong …
11th March 2020
The recent market meltdown reflects concerns about the economic impact of the COVID-19 virus. This will inevitably hit commercial property, but in our view, the downside is likely to be relatively modest. The spread of the coronavirus from Asia into …
6th March 2020
The uptick in government and corporate bond yields in Q4, coupled with the continued decline in property yields, resulted in a deterioration in the relative valuation of commercial property markets in Europe. (See Chart 1.) That said, less than a third of …
5th March 2020
In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
The recent strength of Milan office take-up has not prevented rental growth slowing and isn’t likely to be sustained in 2020. Indeed, we expect a slowdown in employment growth to weigh on occupier demand. Combined with supply increasing twofold, prime …
All-property rental growth eased across most markets in 2019, but the slowdown was concentrated in the retail sector. Admittedly, the Swiss markets remain a bright spot as prime retail rents increased in 2019. But there is no denying the retail sector in …
27th February 2020
Consistent with softer economic growth, annual rental growth for office and industrial property in CEE markets slowed in Q4. However, rental growth picked up for retail, bucking the downward trend seen elsewhere in Western Europe. (See Chart 1.) And …
26th February 2020
Although euro-zone rental value growth slowed in 2019, further falls in property yields supported capital values. Despite the soft economic backdrop, capital value growth should hold up in coming quarters. (See Chart 1.) However, a further slowdown in …
21st February 2020
Despite softer occupier activity and an increasing pipeline of supply, we think that demand will be strong enough to prop up office rental growth over the next two years. That said, given that we now expect bond yields to be higher, capital value growth …
18th February 2020
Softer office occupier demand is expected to weigh on German prime office rents this year. But we still think that rents can grow at a decent pace because, even though office supply is expected to increase significantly, office occupier demand will still …
14th February 2020
Indicators suggest that Irish industrial rental growth will remain healthy in Q1. However, as economic growth slows and uncertainty about the UK’s future relationship with the EU continues to impact decision making, we expect that industrial rental value …
13th February 2020
The latest data revealed that commercial property investment in the euro-zone held steady at a record high level. And with favourable relative pricing and capital readily available, we think that investment will reach a similar level this year. Following …
6th February 2020
A reduction in Chinese tourism as a result of the coronavirus will lead to lower spending on prime high streets, particularly in Rome, Paris and London. If tourism reduces on a global scale, the impact on spending would be greater. But so long as the …
4th February 2020
