Filtered by Region: Europe Use setting Europe
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
A decade after the start of its first bailout programme, the Greek government has still not reined in the cost of its pension system. And the government’s recent decision to raise pensions suggests that pension costs will increase, rather than fall, in …
3rd February 2020
We still think that the ECB will loosen policy this year, albeit by a little less than we had previously pencilled in. But with interest rates and bond yields still set to remain at historic lows, property will continue to look fairly priced. As such, it …
31st January 2020
As long as the number of coronavirus cases remains low in Europe and contained elsewhere in the world, the impact of the virus on euro-zone GDP is likely to be small and temporary. It would need to be much worse than the SARS outbreak in 2003 for economic …
29th January 2020
The ECB left its policy settings unchanged today, made little change to its assessment of the economic outlook and said nothing new about the strategy review. While the markets are pricing in no policy changes this year, we still suspect that the Bank …
23rd January 2020
This morning’s decision by the Norges Bank to leave its key policy rate on hold at 1.50% was widely expected. We suspect that the Bank will leave rates on hold until 2022 though, if anything, our forecast for oil prices to rise suggests that the balance …
The ECB could decide in its strategy review to include owner-occupied housing costs in the measure of inflation which it targets. But we think it is unlikely to do so and, in any case, such a change would not make much difference to measured inflation, …
22nd January 2020
After holding up despite the slowdown in economic activity, we expect jobs growth in office-based sectors to lose momentum over the next two years, weighing on occupier demand. This underpins our forecast of a slowdown in growth in euro-zone prime office …
While we have altered our forecasts for ECB policy this year, we are still more dovish than investors about the outlook for interest rates in the euro-zone. As such, we continue to think that government bond yields in the region will fall back and that …
21st January 2020
Underlying inflation pressures in the euro-zone have been building over the past five years, but so slowly that it’s barely perceptible. And rather than being the start of a new trend, the jump in core inflation at the end of last year is more likely to …
20th January 2020
Although the share of global capital raised by European-focused funds has reduced in the last couple of years, there are indications that investors are starting to view real estate in Europe as increasingly attractive. This supports our view that demand …
The account of December’s ECB meeting confirmed that the Governing Council is content to leave monetary policy unchanged for some time. But it left the option of further easing on the table – an option that we think it will take up in the second half of …
16th January 2020
As the slowdown in household spending and the growth in e-commerce weighs on prime retail rents, we think that rents will fall in all Nordic cities this year. While most of continental Europe has been grappling with weakness in the retail sector, much of …
15th January 2020
Five years after the so-called Frankenshock, the SNB is near the end of the road for conventional monetary easing. Accordingly, the Bank may be forced to make another radical policy choice if there is a substantial appreciation in the franc in the coming …
13th January 2020
Despite Spain’s relatively strong economic outlook compared to its European peers, with real prime rents at high levels and the economy losing momentum, we think that prime retail rents will fall in 2020. After growing by around 7% in 2018, there was …
With interest rates set to stay lower for longer, we think that property yields will decline further in 2020. The exception is retail where, outside of Emerging Europe, yields are expected to rise in response to the bleak rental outlook. Nonetheless, even …
8th January 2020
While we could have been bolder with our forecast for rental growth in Europe, in particular Nordic offices, on the whole our forecasts for 2019 proved to be correct. With 2019 now behind us, it is worth looking back to see how our predictions for the …
7th January 2020
We think the euro-zone will continue to struggle in the first half of 2020 as Germany and Italy remain close to recession and inflation stays well below target, prompting the ECB to loosen policy further. Things should improve a bit in the second half of …
19th December 2019
Although the anaemic performance of the euro-zone economy is expected to weigh on occupier demand, real estate equity markets suggest that confidence in property markets has held up. We think that this will spark an improvement in investment activity next …
18th December 2019
While Ms Lagarde’s assessment of the outlook in today’s press conference was slightly less gloomy than Mr Draghi’s in October, this does not change our view that the ECB will loosen policy again during 2020. After all, policy would need to be eased even …
12th December 2019
Today’s decision by the Swiss National Bank to leave its policy stance unchanged came as a surprise to nobody. Five years on since the Bank first cut interest rates into negative territory, there is every chance that it will keep them below zero over the …
After cutting rates by 150bps since April, the Central Bank of Iceland kept its deposit rate at its current record low of 3.00% today. We suspect that in the absence of a sharp and sustained fall in inflation expectations, the Bank will keep rates …
11th December 2019
House price inflation in Spain is now slowing but we do not envisage a slump in property prices that would derail GDP growth. After all, economic and financial conditions are supportive and there is little evidence that valuations are particularly …
5th December 2019
Our economic forecasts for Italy are based on the assumption that the coalition government holds together, at least for the next two years. But in our view, the economic impact would be small if it fell apart. Bond yields would probably rise, but not as …
3rd December 2019
In its first five months in office Greece’s new government has implemented a range of tax cuts that should support the economy and has made a start with some structural reforms. But we are sceptical that it will execute the deeper reforms needed to raise …
26th November 2019
While the manufacturing downturn has not helped the industrial sector in Germany at a national level, growing e-commerce means that prime industrial rents will still muster some growth over the next few years. Nevertheless, Germany will lag markets like …
22nd November 2019
Calls for much looser fiscal policy in the euro-zone are falling on deaf ears. While the Netherlands and Germany have set out fiscal stimuli for 2020, each has past form for running tighter policy than planned. And any loosening in these countries is …
21st November 2019
The euro-zone’s services sector has held up relatively well so far this year. However, we expect spill-overs from the industrial recession and slowing employment growth to take a toll in the coming months. The latest business surveys point to a sharp …
18th November 2019
The latest activity and confidence indicators point to continued near-stagnation in the Italian economy. While household consumption is likely to keep growing, prospects for investment and exports are bleak. Italy’s GDP has increased by 0.1% q/q in each …
12th November 2019
The prospect of further political stalemate in Spain, following yesterday’s inconclusive election result, does not alter the short-term economic outlook. But it does mean that there is little chance of a fiscal stimulus, or of making progress in reforming …
11th November 2019
Spain’s fourth general election in as many years looks likely to result in further political stasis, but we doubt that this will have a detrimental effect on the economy. Nevertheless, weaker consumer spending and investment are likely to cause GDP growth …
5th November 2019
Office-to-residential conversions in the Nordic capitals have started to lose their appeal given the pick-up in office capital values and softening in house prices. However, we don’t think that this poses a major risk to our forecast for relatively strong …
1st November 2019
While the risk of a no deal Brexit has diminished, lingering uncertainty and structural headwinds are likely to put downward pressure on prime retail rents in Dublin over the next two years. After holding up relatively well compared to its euro-zone …
29th October 2019
As valuations have improved this year and investors have become willing to accept lower yields, demand for quality Paris assets has ballooned, most likely driving a record year for French investment. This has begun to push prime yields lower and we now …
23rd October 2019
Demand for Swedish property has been on a tear this year, even as the economy has faltered. This likely reflects investor expectations that growth will be supported by even looser monetary policy over the next few years. In this environment, competition …
11th October 2019
The yield of 10-year government bonds in Portugal has fallen below that of their counterparts in Spain this week after Portugal’s Socialist Party retained power in Sunday’s legislative elections. While we think that the yield spread will stay low by past …
Calls for any fiscal stimulus to support the Swedish economy are likely to fall on deaf ears, so the burden will continue to be entirely on the Riksbank. A combination of a dovish shift by the Bank and a further escalation in global trade tensions will …
9th October 2019
While Paris prime retail rents rose in 2018, we doubt this marks the start of a prolonged upward trend. With tourist flows set to stagnate due to a weak global economy, rents will not rise by much before 2023, but the continued attraction of Europe’s …
There has been a dramatic expansion in the co-working office sector globally over the last five years. As these operators use a different approach to traditional landlords, this brings new risks to office markets, though we feel it is probably too soon to …
2nd October 2019
We estimate that the direct and indirect effects of the slump in vehicle production account for around half of the downturn in German industrial production since the beginning of last year. A sustained recovery will not take place until the sector is back …
1st October 2019
Suggestions that the recent rise in interbank rates was caused by the ECB’s new tiered interest rate system are wide of the mark. Instead, the increase reflects investors’ re-evaluation of the outlook for policy rates. They now anticipate a single 10 …
30th September 2019
The latest business surveys from Switzerland indicate that the woes in Germany are posing an increasing drag on activity. We have therefore revised our forecasts for Swiss GDP growth down to just 0.5% this year and next, which puts us well below the …
The giveaways to households and firms announced by French finance minister Bruno Le Maire yesterday do not alter the fact that there will be a tightening in France’s fiscal stance in 2020. Indeed, the French government has not got the will (nor the scope …
27th September 2019
A further downgrade to the euro-zone growth outlook means that additional monetary loosening is on the cards. While this doesn’t substantially shift our expectations for property yields over the next few years, it will keep the supply of capital strong …
The changes to the SNB’s tiering system, announced yesterday, are even more generous to domestic banks than they initially appear, and will help to ‘sugar the pill’ ahead of a probable rate cut. The main point of interest at yesterday’s SNB meeting was a …
20th September 2019
This morning’s decision by the Norges Bank to raise its key policy rate by 25bps, to 1.50%, was is in stark contrast to the rate cuts delivered by the Fed and the ECB over the past week. Nonetheless, given the dovish shift in the Bank’s tone, we agree …
19th September 2019
Given that the Swiss National Bank last changed its policy stance in January 2015, this morning’s decision to leave its policy rate on hold at -0.75% came as no surprise to us. But its tweak to make its tiering system more generous to banks lends further …
