Filtered by Region: Europe Use setting Europe
While the vaccine rollout in Europe has finally kicked into gear, the legacy of the slow start means the EU is more exposed than the UK or the US if the Indian variant spreads quickly amongst the unvaccinated. The vaccine rollout on the continent has gone …
18th May 2021
The ECB will make a big splash about climate change when it concludes its monetary strategy review this autumn. In practice, it is likely to make progress in addressing climate-related risks in the banking sector and it may also announce some limited …
Economic analysis at the cutting edge Given that the Riksbank left its policy settings on hold in April, the minutes from the meeting (which were released this week) were never going to be a rip snorter. That said, we were keen to pore over them for clues …
14th May 2021
Last year, rents held up better in Barcelona’s CBD, and we expect this trend to continue this year. That said, higher rents in the CBD mean that they are also likely to be hit harder from the shift to remote working and associated reductions in office …
13th May 2021
Tough start to the year, but outlook brightening The weaker-than-expected 1.0% q/q decrease in Norwegian mainland GDP in Q1 confirmed that the economy slipped behind its Swedish counterpart at the start of the year, and suggests that it is now unlikely to …
12th May 2021
What’s Swedish for “gangbusters”? Preliminary GDP data released last week indicated that Swedish output had already surpassed its pre-virus level in March – faster than it takes many to assemble IKEA furniture. In the meantime, the strong set of activity …
7th May 2021
Following stronger than expected Q1 data, we have revised up our rental forecast for 2021. And Prague’s low costs and constrained supply means that we think rental growth has further to go this year. Following an increase of 0.5% last year, we had …
6th May 2021
More working from home will inevitably change cities as we know them. However, cities are more than just workers. This means that cities where a higher share of jobs can be done remotely are not necessarily the ones where the impact of remote working on …
5th May 2021
GDP data published this morning confirmed that the euro-zone economy contracted slightly in Q1, even though the business and consumer surveys painted an improving picture. Those same surveys suggest that sentiment and activity improved again in April. The …
30th April 2021
Recent developments add weight to our view that Stockholm office values will rise by more than most other western European markets over the 2021-25 period. However, even in Stockholm, these gains will be much weaker than in recent years. In our latest set …
29th April 2021
EC offering carrots, following failure of the stick The long-running saga over a new bilateral “framework agreement” between Switzerland and the EU is back in the news, with the current Swiss President, Guy Parmelin, set to meet his European Commission …
23rd April 2021
With retailers in Belgium set to remain under pressure due to shifts in spending, we think that prime high street rents will extend their falls this year. And with e-commerce remaining a dark cloud over retail, the recovery in rents beyond this year will …
21st April 2021
The Riksbank is all but certain to leave its repo rate on hold next Tuesday (27 th April), and will stick to the plan to spend the entire SEK 700 billion asset purchase envelope by the end of the year. The stage is set for a prolonged period of policy …
20th April 2021
As elsewhere in mainland Europe, the slow vaccine rollout means that the rebound in domestic activity is unlikely to get underway in earnest until Q3. Denmark is a noteworthy exception; its comparative success in containing the virus has allowed it to …
16th April 2021
Public health officials calling the shots This week’s decision by Denmark to discontinue usage of the AstraZeneca vaccine understandably took the headlines. (Incidentally, note that the jab is now officially known as ‘Vaxzevria’, which could be a …
The partial unwinding in the reflation trade in recent weeks has stopped the decline in the Swiss franc in its tracks. Having depreciated against both the US dollar and the euro since the start of this year, the franc rose against both currencies in …
14th April 2021
Initial demand indicators support our view of further falls in Dublin office rents this year. And with construction on hold, spill overs from delayed completions could threaten the rental recovery. CBRE data for Q1 showed that weak economic activity and …
The IMF gives Switzerland tops marks for effort The IMF completed its latest Article IV consultation with Switzerland this week. The concluding statements of such missions are typically rather anodyne but this one included some linguistic flourishes. For …
9th April 2021
Few office or retail markets currently look economically viable for residential conversions. However, expected falls in values, particularly for retail, and acute housing shortages suggest that there is scope for conversions to increase in many markets. …
While we have revised down our oil price forecast for Q2 and Q3 this year in response to the OPEC+ decision to ease production cuts, we still think a rebound in global demand will help push oil prices back above $70 per barrel. We expect weaker oil demand …
8th April 2021
After declining in 2021, we think that favourable supply conditions and a rebound in consumer spending will support a recovery in Budapest retail rents into next year. And while the sharp increase in online shopping last year suggests a downside risk to …
Travel restrictions will hold back cross-border capital flows until at least H2. And given that we expect extra-European capital to return particularly slowly, total investment is set to recover gradually in 2021. With travel restrictions tight for most …
1st April 2021
Despite a more supportive outlook for property valuations, we think that weaker rental prospects will result in southern European property markets continuing to underperform into 2022. Last year we highlighted that southern European property would …
30th March 2021
Later this year, the European Commission is expected to provide draft details on how the EU will introduce and implement a carbon border adjustment mechanism (CBAM, often dubbed a ‘carbon border tax’) as part of its plan to tackle carbon leakage and …
26th March 2021
Overview – The Swiss and Scandinavian economies and their property markets are likely to weather the pandemic better than many others in Western Europe. We expect all-property values in the region to hold steady or see small falls this year. However, even …
25th March 2021
The easing of virus restrictions in Greece this week – despite rising case numbers – is unlikely to change the picture for Q1; the economy probably contracted. Moreover, if it leads to a faster spread of the virus, it could even delay the start of the …
23rd March 2021
Thanks to changing consumption patterns and structural and cyclical knocks to the traditional property sectors, both occupier and investor demand for data centres set new records last year. But, while further strong growth is likely, we don’t expect these …
19th March 2021
Norges Bank’s Intentions (4,4): RATE HIKE The Norges Bank’s decision to leave its policy rate on hold at zero this week was never really in doubt. However, as we expected, policymakers shifted to a more hawkish stance and prepared the ground for the start …
Overview – Euro-zone prime property will likely get off more mildly than many expected at the start of the pandemic. We forecast another small fall in all-property capital values this year, with yields holding steady and rental values extending their …
18th March 2021
After weeks of indecision the ECB pledged yesterday to make “significantly higher” bond purchases in the coming quarter. (See here .) As weekly purchases since New Year have averaged €14bn, anything less than €20bn would, in our view, not be …
12th March 2021
Oh no, not more ECB QE! The SNB would have been forgiven for being a bit perturbed by the dovish message from the ECB yesterday that it expects the pace of its asset purchases to be “significantly higher” in the coming quarter. After all, the prospect of …
The increases in Swiss, Swedish, and Norwegian government bond yields over the past month or so have illustrated the extent to which smaller bond markets get dragged around by global conditions. As has been the case since the start of the pandemic, the …
11th March 2021
Given that the natural vacancy rate (NVR) provides a better gauge of office market conditions than the absolute vacancy rate, we set out to estimate the NVR across European office markets. Future market conditions implied by our NVR estimates are broadly …
Dutch GDP fell much less than the euro-zone average last year and, even though the economy is unlikely to avoid contraction in Q1, we think it will regain its pre-crisis level sooner than any other major euro-zone economy. Next week’s election should not …
10th March 2021
Slow vaccine rollout casts shadow over 2021 The third estimate of euro-zone Q4 GDP confirmed that the economy contracted a little in Q4 2020, driven by weaker consumer spending. Ongoing restrictions mean that another fall in GDP is likely in Q1, while the …
9th March 2021
With bond and equity dividend yields trending lower, valuations improved in Q4 for offices and retail, while they held steady for industrial. But in Q1, given the recent bond market rout, valuations are likely to deteriorate. (See Chart 1.) That said, the …
8th March 2021
Swiss franc seems set to fall further Swiss inflation came in below expectations in February (see here ), but the period of deflation is likely to end soon. As elsewhere, the latest manufacturing PMI pointed to rising price pressures from disruption and …
5th March 2021
This week, pressure on bond yields, inflation and national health services continued to build. Daily Covid-19 infections are rising again in Italy and France, and the number of people in intensive care with Covid is increasing in both countries. (See here …
The underwhelming vaccine rollout in Europe will probably delay the easing of restrictions and means that the best of the vaccine bounce will be pushed into Q3. That said, the planned EU-wide vaccine passport offers a lifeline for tourist-dependent …
2nd March 2021
In light of our latest long-term economic and financial market forecasts, we have revisited our views for commercial property performance over the next three decades. We think that average returns will be lower than in the recent past, but that property …
1st March 2021
Europe’s natural gas pipeline network is already extensive, and we think that it is going to get bigger in the coming decades. Existing pipelines in Turkey are set to be expanded and new pipelines from Africa and the East Mediterranean Sea will probably …
22nd February 2021
Following the decline in 2020, we think prime office rents in Amsterdam will hold steady this year. But rental growth should pick up thereafter, supported by continued growth in the information and communication sector, comparatively low rents and the …
17th February 2021
In our Future of Property research, we identified important post-pandemic shifts in most real estate sectors. How these trends interact will be key to the outlook for the urban locations where most real estate is clustered. We think it is premature to …
4th February 2021
Differences in rental prospects and risk premia confirm our view that, despite looking overvalued compared to government bond yields, there is still scope for larger falls in industrial yields in the German markets compared to most southern European …
1st February 2021
No sooner had we put the final touches to our quarterly Outlook than some of the downside risks to our forecasts have begun to materialise. Our prediction of a brisk recovery in GDP beginning in the second quarter was based on two assumptions: (i) that …
29th January 2021
Overview – The vaccine rollout is likely to make enough progress for most pandemic-related restrictions to be lifted in the spring. If so, we think euro-zone GDP will regain its pre-pandemic level by the middle of next year, with Germany getting there …
21st January 2021
Although rental growth prospects for prime property are weak compared to recent years, the outlook is better than for secondary property. As such, we think that investors will continue to focus on prime assets this year, allowing prime office and …
18th January 2021
In contrast to the relentlessly grim epidemiological numbers, the economic data for the euro-zone published this week have been fairly positive. The 2.5% m/m increase in euro-zone industrial production in November points to output rising in Q4, helping to …
15th January 2021
Recent movements in the REIT market add weight to our view that structural factors, rather than cyclical ones, will determine the outlook for property markets over the coming years. In turn, irrespective of a successful vaccine rollout, the recovery in …
14th January 2021
Our working assumption is that the vaccine rollout proceeds fast enough for governments to start lifting restrictions in April and that the majority are lifted during May and June. This Update sets out these assumptions in more detail and discusses the …
13th January 2021
