Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
With all-property rental values rising by a little under 0.5% q/q in Q1, it was further yield compression that once again drove capital value growth. But with yields declining by just 5bps, capital values rose by just 1.6% q/q – the slowest rate since …
20th May 2016
Property yields ticked down marginally in Q1, but are now 80bps below their 10-year average. Changes in alternative asset pricing – with bond yields falling and dividend yields rising – mean that prime property is no longer undervalued, particularly in …
16th May 2016
Lacklustre economic growth this year and next due to the strength of the Swiss franc is likely to drag Swiss office rents down further. But with negative bond yields and interest rates, this is unlikely to prevent yields from edging a little lower. … …
12th May 2016
Norwegian manufacturing sector activity has slowed due to the drop in the oil price, whereas in Denmark and Sweden, output continues to grow steadily. Across the 2016-19 period, this will support solid rental growth rates in Denmark (2.1% p.a.) and Sweden …
6th May 2016
Investment activity across Europe declined in Q1. However, we don’t think that this is a sign of things to come this year. Indeed, investor sentiment remains upbeat, while strong capital flows are likely to put upward pressure on capital values. … …
3rd May 2016
A solid debt market and a high volume of capital chasing commercial property will keep bidding on prime assets competitive. Coupled with improving prospects for rental growth, we believe that this will drive prime European yields 15bps-20bps lower in the …
29th April 2016
German consumption growth is set to moderate this year and next. However, due to demographic factors, prospects for retail sales in the main cities seem stronger than for Germany as a whole. Combined with the importance of well-located stores for …
28th April 2016
Solid employment growth will support strong occupier demand for Warsaw offices. But , the city’s huge development pipeline will again push rents lower in both 2016 and 2017. As such, we expect prime office rental values to decline by 5.4% in total across …
27th April 2016
The falls in Moscow office and industrial rents since 2014 have been largely in line with our expectations. But despite large falls in real wages, retail rents have fallen by much less than we anticipated. Given that economic weakness in Russia is set to …
21st April 2016
A softening in the retail sector has negatively impacted the wider retail market in Belgium. However, new entrants from abroad remain keen on the prime high streets and shopping centres in major cities. That will support rental growth of around 2%-2.5% …
20th April 2016
Last year, office take-up in Milan hit a new record and the vacancy rate fell for the first time since 2008. Although both factors imply the recovery in office rents may be about to gather momentum, there are a number of reasons why rental growth is more …
18th April 2016
The Grand Paris Express project will reduce travel times between Paris’ major hubs and will support urban renewal in a number of regeneration areas around the city, including new office hubs. By itself, we do not see this as a major risk to prime CBD …
15th April 2016
In 2015, German logistics take-up hit a new record. Although the Kiel Institute’s logistics sentiment indicator fell to its lowest level in three years in Q1, consumer goods companies and delivery companies reported solid results, suggesting that occupier …
14th April 2016
It is most likely that the UK will vote to stay in the EU. However, in the event of a ‘leave’ vote, it is not necessarily the case that European commercial property investment would be immediately boosted at the expense of investment in the UK. … What …
13th April 2016
Positive consumer sector fundamentals reinforce our belief that prime retail rental values in Prague will rise by 3.7% p.a. in 2016-18. Low alternative asset yields and positive fundamentals mean that although prime retail yields have dropped to just …
8th April 2016
Early indications from Q1 2016 suggest that office yields in Oslo are coming under upwards pressure. Although consistent with the weakening rental market, this is contrary to our current forecasts. However, until complete Q1 data is released, it is too …
5th April 2016
With property yields in Western Europe at historic lows, investors are looking to core CE markets for higher income returns. This will lead to heightened competition for assets in these markets and drive all-property yields down by 65bps by the end of …
1st April 2016
We expect Denmark’s economic recovery to strengthen further, with employment growth in particular solidifying. This will drive a further pick-up in demand for offices and, although much of the new demand is for out-of-town space, prime rents will be …
31st March 2016
Despite the ECB’s recent monetary loosening, we expect further stimulus measures will be required to reinvigorate growth and push inflation back towards its target. This will prove to be a net positive for prime property, which will continue to be seen as …
23rd March 2016
Steady improvement in the Dutch consumer sector in the next few years will support expansionary retailer demand and drive rental growth rates above those we had previously forecast. We now expect rental growth of 3.3% p.a. in Amsterdam and 2.3% p.a. in …
22nd March 2016
Office rental values in Berlin, Hamburg and Munich now stand, on average, 7% above their prior 2008 peaks, and at their highest levels in 15 years. Even so, the positive economic outlook, low development pipelines, and falling vacancy rates lead us to …
17th March 2016
Finland’s poor economic outlook will not prevent prime office rents from growing further in the next few years. Indeed, we have bumped up our rental growth forecasts for 2016 and 2017 to 3% and 2.5%, from 1.5% and 2% respectively, when compared to six …
16th March 2016
In 2015, office vacancy rates fell in most euro-zone markets. With supply conditions tightening, and office employment picking up at a steady pace, almost every market will see office rents rise this year. … Rising office employment points to rental …
15th March 2016
The outlook for European consumers is relatively poor. Nevertheless, we expect a handful of structural factors to keep prime European retail rents on an upwards trend, growing by 3% y/y. … European prime retail rents show no sign of …
11th March 2016
Office rents in Vienna declined last year. But with the office vacancy rate amongst the lowest in the euro-zone, and the supply pipeline small, even low levels of demand will drive rents higher. … Limited supply means the fall in Vienna office rents …
9th March 2016
The recovery in Hungarian consumer spending is likely to be sustained, boosting occupier demand from new entrants. In the absence of new supply, this will drive rents upwards and encourage investment demand. The upshot is that we expect total returns to …
8th March 2016
Capital value growth is likely to have peaked in 2015, but further falls in yields and steady rental value growth will keep capital values rising in 2016 and 2017. Yet, there will be country and city-level differences. The Norwegian and Turkish markets …
4th March 2016
Compared to our last Analyst, we have increased our expectations for rental growth in some markets, and also pushed down our near term forecasts for property yields. Yet in most markets, lower yields in 2017 will lead to greater upward yield pressure in …
In recent years, across Europe, yield compression has been by far the largest driver of capital value growth. Yet property yields are fast approaching their limit. That means we now need to see a pick-up in rental growth, not only to keep capital values …
29th February 2016
There is a risk that medium-term rental growth in Poland will be lower due to the populous policies pursued by its new government. However, in the short-term, we think property investors will be more influenced by the weakness of the zloty, which will, at …
26th February 2016
Given the historic correlation between property yields in Lisbon and Portuguese government bond yields, the recent spike in bond yields seems worrying. Although a correction in property yields does not seem imminent, recent market volatility supports our …
25th February 2016
Compounded by a negative rental growth outlook, Oslo offices appear overvalued. However, with foreign investors likely to be lured by the historically weak kroner and domestic investors keen on prime property’s relatively secure income yield, we still …
23rd February 2016
Office rental values recorded their strongest quarterly gain since 2011 in Q4. Yet at the all-property level, yield compression, rather than rental growth, proved to be the main driver of capital values. Indeed, the 16bps fall in all-property yields in Q4 …
19th February 2016
The fourth quarter brought clearer signs of an economic slowdown in non-euro-zone Western Europe. And this economic weakness may help to explain the limited extent of rental value growth in Q4 across the sectors. Nevertheless, investor demand for property …
18th February 2016
Frankfurt’s office sector has struggled to shake off the legacy of the credit crunch and structural changes in the local labour market. Add in the likely dampening impact of the recent falls in equity markets, and neither a sharp rise in financial …
12th February 2016
The falls in office yields witnessed in 2015, alongside the stabilisation of yields for other asset classes, mean that European office property no longer looks undervalued. Indeed, whilst the majority of markets are now fairly valued, core markets such as …
11th February 2016
Prime yields fell substantially in 2015, but the rate of yield compression moderated in the third quarter. We think that yield falls will slow in most Western European markets in 2016, but that there could be further large drops in the periphery euro-zone …
10th February 2016
Despite the relatively slow economic growth we expect to see in France in the coming years, structural changes in the retail and logistics markets mean that occupier demand for industrial property will be robust. This will support rental growth of 1.8% …
5th February 2016
Retail rents in Madrid and Barcelona were flat in Q4. Yet the steady outlook for consumption, coupled with strong growth in tourism, suggests that rents will resume their upward trend this year. … Flat retail rents in Spain are not a sign of things to …
4th February 2016
The most notable development in the latest RICS Global Commercial Property surveys is the increase in the proportion of respondents who view property in the core European markets as expensive. Yet a downturn does not seem imminent, and further gains in …
2nd February 2016
We do not expect either a slowing in house price growth or the newly-built Mall of Scandinavia to derail our retail rental value growth forecasts for Stockholm. As a result, we believe that in terms of rental growth, over the next five years Stockholm …
29th January 2016
In view of their strong past relationship, the latest jump in corporate bond yields could be a sign of an imminent turning point for European property markets. However, we are inclined to look through this short-term volatility. Indeed, we expect European …
26th January 2016
Berlin became Germany’s largest investment market in 2015, with investment growth of 120%, far outpacing that in the other major cities. Despite Berlin ranking far above Frankfurt in surveys of investment prospects for 2016, over the coming years it is in …
25th January 2016
Lisbon has been highlighted as one of Europe’s top cities for investment prospects this year. Yet property yields are already at record lows. And as Portugal’s weak economic fundamentals limit the scope for a positive shock to income growth, it is hard to …
22nd January 2016
Fears about China, as well as plunging oil and equity prices, have dominated the start of 2016. However, we believe that concerns over China are overstated and that oil prices will begin to recover later in the year. As such, we think that commercial …
21st January 2016
In PWC’s 2016 Emerging Trends in Real Estate survey, the most notable change in the city investment prospects segment is Athens’ fall back to the bottom of the rankings. Elsewhere, investment prospects were generally deemed to be more positive than a year …
18th January 2016
We expect strong competition for prime assets to push yields lower again in 2016. With prime income yields at such low levels, this is likely to result in further growth in the demand for secondary assets. This will drive a reduction in the …
14th January 2016
The high level of industrial take-up in Italy over the past two years demonstrates the strong effect that e-commerce has had on occupier demand. With the Italian economy now on a positive, albeit subdued, growth path, and the availability of modern space …
12th January 2016
European commercial property investment is likely to have reached a new peak in 2015. But, we believe there are good grounds for expecting further growth in 2016 as new capital sources and other acquisitive investors continue to target European property, …
11th January 2016
