Filtered by Subscriptions: Europe Commercial Property Use setting Europe Commercial Property
Note: We will be discussing the outlook for European commercial real estate markets in a 20-minute online briefing at 10am BST on Wednesday 10th of April. (Register here .) After a solid 2023, we expect Paris prime office rental growth to slow markedly …
27th March 2024
The revival of prime retail rental growth in 2023 ended a three-year rental decline for the sector. This likely marks the end of retail’s rental woes and we have nudged up our prime rent forecast for this year, but we doubt there will be a return to the …
14th March 2024
Improved valuations suggest that the price correction in prime property is almost done. However, with little scope for bond yields in continental Europe to fall from here and property-to-bond yield spreads still narrow compared to the recent past, we …
13th March 2024
Note: Andrew Burrell will be answering questions and highlighting key issues around the size and scale of the recovery in commercial property in a Drop-In on Tuesday, 12th March . Register here for the 20-minute online briefing. Completions in Europe …
5th March 2024
Recent media attention has focused on the downturn in Germany and the travails of its lenders exposed to the crash in property values both domestically and in the US. While the focus on Europe’s largest market is justified, other major euro-zone markets …
1st March 2024
This week we held a Drop-In on commercial property distress across the US, UK and Europe. Clients can access a recording here and find related analysis on our dedicated landing page . This Update provides answers to several questions on the UK and …
16th February 2024
A robust labour market will support Spanish office occupier demand to a greater extent than elsewhere in the euro-zone in the next few years. As a result, we think prime office rent growth will outperform the rest of the region. However, upgrades to the …
12th February 2024
Euro-zone investment improved a little in Q4, but that did not prevent it experiencing its worst year in a decade. While we have raised our forecast for through-year growth, we still expect a weak start to 2024 and think that by historic standards it will …
5th February 2024
At face value, the rebound in European equity REIT prices over recent months suggests that capital values could be nearing their trough. But the past relationship is weak and REITs have benefited from the stock market rally. We therefore don’t see the …
2nd February 2024
The latest RICS survey offered tentative signs that we could be past the worst of the property downturn in Europe, as both occupier and investment demand balances picked up slightly. However, the big picture remained one of a very weak market. Investor …
25th January 2024
The long boom in residential investment has been severely dented by soaring interest rates. Solid fundamentals mean investor interest will remain strong, but it is unlikely residential yields have peaked, or that relative performance will be as stellar as …
24th January 2024
Early prime office yield data for Q4 suggest that the property correction deepened at the end of 2023. The sharp rises in yields occurred despite a more favourable market interest rate environment. This suggests that property pricing still has further to …
17th January 2024
The resilience of euro-zone rental growth last year surprised us. But our analysis indicates that better-than-expected economic activity explained much of that strength and as recession looms in 2024, all-property rents are likely to slow more decisively. …
16th January 2024
Much has been talked about a ‘flight to quality’ in the office sector given the structural shift to hybrid working. However, while there is evidence of this in relative rental performance, a look at the yield data suggests that the opposite has been true …
11th January 2024
The surge in Italian prime retail rents over the past year is likely to give way in 2024, as inflation falls back and consumer spending stagnates. But the strong fundamentals that have supported this outperformance are still in place and will help rent …
10th January 2024
Falling interest rates will herald the end of the commercial property downturn in 2024. However, owing to price declines in H1 we still think values will end the year lower. Our forecast for marginally positive euro-zone returns – while a considerable …
5th January 2024
In another year of upheaval for commercial property in Europe, our forecasts were broadly correct in terms of direction, but underestimated the severity of the downturn. Some, though not all, of this was the result of unexpected macroeconomic factors, …
4th January 2024
A relatively resilient economy and tight supply will support French industrial rent growth in the next two years. However, regional markets stand to benefit most. Availability is greater, and rising, in Paris and poor rental affordability will continue to …
21st December 2023
In Warsaw, more favourable economic conditions will support retail spending and prime rents in the short term. But from 2025, faster rises in online shopping than elsewhere in Europe will cause the city’s retail rents to lag the rest of the region. Warsaw …
20th December 2023
This week, we held a series of property roundtable discussions with clients in our London office as part of our World in 2024 series. In this Update, we outline our thoughts on the most interesting questions raised, covering electoral uncertainty and …
14th December 2023
Our AI work has identified data centres as a clear winner from these innovations. That the sector is already in rude health is borne out by the latest real estate data. But it remains to be seen if it can ever reach the scale to displace more traditional …
30th November 2023
In this Global Economics Update , we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary policy mean that the biggest risks relate to central …
Our recent r* work reinforces the view that property yields will stay relatively high longer term. That implies global returns in low single digits over the next decade or so, well below pre-pandemic averages. Our recent Global Economics Focus summarises …
27th November 2023
Milan prime office yields appear very low both compared to other alternative assets and other euro-zone countries. By any standards, office property there looks highly overvalued. But looking ahead, as rent growth trails elsewhere in the region, we expect …
20th November 2023
November’s IPF Consensus Survey showed that, although euro-zone office rental growth is expected to slow next year, forecasts remained unchanged on average from the May survey. In contrast, given the ongoing deterioration in office leasing and the weak …
15th November 2023
The bankruptcy of WeWork in the US was a predictable end to a long-running saga. Its effects on office markets will not be systemic, but they will reinforce existing weaknesses and pile more bad news on the sector just at the wrong time. The announcement …
9th November 2023
Despite the steepest crash in commercial property values on record, the credit risk and asset quality of European banks’ commercial real estate (CRE) lending is holding up well. Further declines in values mean there could be a further deterioration, but …
8th November 2023
This week we held a drop-in on the prospects for commercial property investment in the UK and Europe, which can be found here . This Update provides answers to the most interesting questions that emerged from the discussion. Will prime offices outperform? …
3rd November 2023
We expect industrial rents in Belgium to outperform the rest of the euro-zone on the back of a brighter economic outlook, very tight supply and a larger rise in e-commerce. We forecast annual average rental growth to reach 3.5% p.a. for the period …
2nd November 2023
European investment fell sharply again in Q3 but with interest rates at their peak we think the downturn will soon bottom out. However, our upgraded bond yield forecasts indicate only a limited easing of financing conditions next year, so we think the …
30th October 2023
The preliminary data for Q3 were sobering, with euro-zone prime yields moving up significantly more than expected. This confirms the 2022-23 real estate contraction as the worst on record and, with offices the key driver, it now looks like the value falls …
27th October 2023
The diffusion of AI technologies should be a fillip for the global economy over the coming years. That will bring benefits for real estate performance in developed economies, particularly in those office markets with concentrations of knowledge …
20th October 2023
Anticipation of legislation requiring minimum standards of energy efficiency is already impacting CRE values as investors price in transition risk and this pressure is likely to ramp up in the coming years as compliance deadlines harden. This note …
19th October 2023
Industrial rental growth in the Nordics is set to slow in 2024. But a brighter macroeconomic outlook and tight vacancy will help rent growth to outperform the euro-zone. Further ahead, the current high level of online adoption relative to the euro-zone …
13th October 2023
The scale of the rise in bond yields over recent weeks has provoked worries about the impact on real estate. The sell-off presents an upside risk to our yield outlook, but we think falling inflation will help bond yields across the region to soon fall …
9th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
Fair value calculations combine valuation analysis with a forward-looking view of rents. As such, these estimates reinforce our existing view that there is scope for declines in euro-zone yields, albeit limited. They also confirm that these falls are very …
29th September 2023
The weakness in German construction activity has raised questions about whether a slowdown in new office supply could offset the weakness in demand and prevent a rise in vacancy. But we think that on balance it won’t be enough and that rental growth will …
26th September 2023
The following is a presentation that our Chief Property Economist Andrew Burrell gave to the District Conference in Barcelona on 21st September, 2023. … Where next for euro-zone …
22nd September 2023
The problems of WeWork, which have intensified in recent months, do not look reflective of significant distress in the wider flexible office market. However, flex has yet to see much of a boost from greater hybrid working and may not be immune from …
19th September 2023
Over the last year or so, spreads over sovereign yields have narrowed to their lowest since the euro-zone debt crisis. But while these are expected to widen again over the next year, mostly thanks to falling bond rates, they look set to stay well below …
13th September 2023
After a strong 2022, annual office rental growth has slowed in Italy in H1 2023. And given the contraction in employment we are forecasting, together with increased supply, we think prime rents will largely stagnate both in Milan and Rome until 2025. …
12th September 2023
The Budapest office market has underperformed in recent years, with rents lagging the rest of the region. While some weakness is likely for the rest of this year, the outlook is improving. With a more limited supply pipeline and improving demand, Budapest …
7th September 2023
The latest real estate data suggest that the current drop in capital values in the euro-zone will be as bad as the post-GFC correction. But market sentiment has been less negative this time, particularly for occupiers, which we think largely reflects the …
6th September 2023
While the macro backdrop was broadly unchanged, rents were stronger and yields were higher than expected in Q2, forcing us to re-examine our 2023 real estate view. As a result, we have edged down our end-year all-property view for capital values. This now …
31st August 2023
A strong rebound in tourism has bolstered retail rents in Spain and Portugal over recent quarters. However, we think this boom has run its course. Alongside a weak domestic consumer outlook, this should keep Iberian retail rents subdued for the rest of …
30th August 2023
The German retail market has been one of the weakest in Europe since the beginning of 2022 and rental performance so far in 2023 has been well below the euro-zone average. But, with consumer confidence and high street footfall improving, vacancy …
24th August 2023
Property yields have risen less sharply this year, but there remains considerable uncertainty about where they will peak. We returned to our yield model for guidance and, while a re-specified equation supports our view that office yields will top out at …
18th August 2023
Bucharest offices have been CEE’s best performing so far this year, as rent growth has accelerated rapidly. Although we expect growth to slow sharply from 2024, constrained supply of prime space and persistently high inflation suggest prime rents will …
10th August 2023
While Paris rents have been flat for some time, there are signs that the post-pandemic rebound in tourism is starting to boost high street luxury retail. And the upcoming Paris Olympics in 2024 will also add to demand, meaning retail rental growth should …
8th August 2023