Our latest European Commercial Real Estate 360 report has just been released, covering the economic outlook and real estate position across Europe.
Key findings of the November report indicate that;
- While the fundamental story remains intact, the recovery will be neither fast or straightforward. We have revised down our near-term profile for growth and revised up our forecasts for inflation, reflecting what we perceive to be predominantly a negative supply shock.
- Q2 2021 saw a surge in investment with levels comparable to 2018 or 2019. In comparison, the increase in Q3 2021 was moderate, almost reaching the average of previous years.
- Letting activity in Europe sharply accelerated in Q3. Volumes amounted to 6.56 million sqm in the 26 main markets, up 15% on last year. However, pre-crisis volumes or even the long-term average will not be reached in 2021.
- The occupier market is thriving with demand structurally strong, boosted by ecommerce. Investment is setting a new record and prime yields are still compressing, reflecting aggressive pricing on prime products.
- While retail trade is resuming across Europe, retail investment slightly improved over the last two quarters, boosted by a rising interest for retail warehousing and supermarkets.
