EU Commercial Real Estate 2016 Overview
In most commercial property markets within EU the appetite is still going strong. Germany is still in the lead and has been for the second consecutive quarter. However, according to the latest RICS Global Commercial Property Monitor political events in Spain and the UK have began to have an impact on these markets.
Germany’s strong gains that were recorded in recent years, have increased valuations dramatically. Due to this increase close to 3 quarters of respondents in Berlin, Munich and Frankfurt now consider their local markets to be expensive. Despite this Germany continues to be an attractive centre for funds.
The data is consistent with increasing interest in some secondary locations as rental growth prospects support a more positive view on pricing thus increasing confidence.
SPAIN AND THE UK
With both the capital values and rents of commercial properties expected to increase over the next year in Spain and the UK we can confidently say that the market is still doing well.
However appetite for investors has decreased when compared to previously. Due to the inconclusive general elections in Spain and the approaching EU referendum in the UK. The DATA suggested that political uncertainty has began to factor in to investors decision making
Ireland Portugal and Hungary
Job creation has been driving demand for leasable space and subsequently effecting the demand supply ratio. The data suggest this could very well be the reason for the
robust investment market trends in both Portugal and Hungary. A firm rental increase is expected within the next year in cities like Dublin, Lisbon and Budapest. These cities continue to offer competitive valuations. The data also suggests that the upturn within these markets are still between the mid and early phase of the real estate cycles.
Rent expectations are in the positive within the retail and office categories.However within the industrial sector, expectations remain on the edge.
In poland investors demand rose significantly but expectations for growth remain low and are expected to turn negative within the next year following the softer trend in the occupier market. However in the rest of central and eastern Europe expectations remain (for the most part) positive.
GLOBAL TRENDS DEVELOPING ECONOMIES
A positive sentiment has been shown across developed economies, with an increase in investment and occupier demand for commercial real estate, especially in the EU according to the Q1 2016 RICS Global Commercial Property Monitor.
Bad news for emerging markets as exporters of commodities continue to struggle, despite the fact that China’s market conditions appear to be stabilizing after what happened recently when the chinese government took measures to reduce the risk of severe economic slowdown. The general perception of the asian markets remains cautious.