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Re-pricing to spur demand for well let secondary assets.
Momentum grows from bedrock of belief in price stability
DTZ has suggested that there is “mounting evidence of recovery” in UK property, driven by an increase in non-bank lending and also banks sorting out their balance sheets.
Sterling’s loss is London sellers’ gain
In the first three quarters of 2012, almost €4.8bn was invested in German retail properties and thus 42% less than in the same period last year.
With take-up of 2.6m sq ft in H2 the Berlin office market achieved an outstandingly good result, according to a report by BNP Paribas Real Estate.
The investment market for commercial properties in Germany saw a total investment volume of €9.4bn in the first half of 2012, 15% less than in the same period of last year, a market report by CBRE shows.
The brisk investment activities, particularly in the first half of 2011, have led to positive results for the German hotel investment market.
After a record year in 2011, the slump expected in 2012 has not yet affected the French logistics market, in which take-up has even risen slightly. However, take-up is likely to slow in the second half.
The letting activity in Ile-de-France remains moderate but the signs of recovery are strong in Paris where demand has doubled in the space of twelve months. In the CBD, some deals have again crossed the threshold of €800/sqm/year.
“Although the economic climate appears bleak, business activity in 2012 will be driven by more opportunistic strategies. The supply and demand situation is expected to become even more balanced this year with higher take-up of second hand properties. With the economy set to improve in 2013, new developments may become very sought after.”
In the absence of any speculative developments, the Grade A warehouses located on the North/South axis will be occupied at a steady rate. The prime rental values should consequently be maintained.
Direct real estate investments in the Roman market in 2011 were reduced by about one third compared to 2010. This negative resultwas formed substantially in the last three months of the year, when the market was essentially stationary.
“The decreasing levels of demand for office space in 2011 coincided with deteriorating economic sentiment. Only significant rental adjustments and incentives were involved in large scale lettings; we have seen 2012 begin stronger than the previous year”.
Q4 2011 was characterised by very scarce investment activity in the Milan real estate market.
In 2011 close to 415,000 sqm of GLA came on to the market. For the first time in recent years the difference between the volume of new space and the beginning of the year forecast is minimal, which shows that developers carry out the projects that are clearly considered to be feasible.
Another steady three months of office take-up in Dublin despite economic backdrop
The issues of depreciation and obsolescence have recently become more relevant for owners of Dublin office buildings.
As is generally the trend, the months of July and August were relatively quiet in the Dublin office market with few transactions completed in the period.
There was a surge of industrial transactions completed in Dublin during Q2 2012, with take-up in the three month period more than double that achieved in the first quarter of the year
The leasing activity in the Brussels office market slowed during the year. Overall 2011 take-up was 321.400 m² representing a 36% fall on the Brussels’ market five year average and down 33 % from 2010.
The activity recorded at mid-year (90,000 sq m) is in line with the average and offers a much better performance to the secondary markets as a whole than Brussels.
“In a weakening macro-environment where interest rates are heading downwards again, we are expecting investors to become more aggressive on long-term let assets.”
An outstanding combined semi-industrial and logistics take-up has been recorded in Q2 2011. Over 423,000 sq m have found new occupiers this quarter.
In line with most economies in Europe, Sweden’s economy has experienced a mild downturn in the last two quarters. However, Sweden’s solid public finances allows for a expansionary public policy in order to support the economy.
Occupier demand for quality offices in Moscow remains robust.
Despite the negative occurrences in the European economy and the lowering of USA credit rating, the typically ‘holiday’ month of Augustshowed high activity both from the tenants and the landlords.
2011 was a record year for investment in Russian real estate. €4.55bn was invested, which is over 1.5 times higher than in 2008, the previous record year.
Retail rents along Paris’ Champs Elysees remain the highest in Europe, according to Jones Lang LaSalle’s first report on Prime High Street Rents in Europe.
Central and Eastern Europe
Completions on the rise for 2013. Eastern part of Poland catching up.
2011 Q1 investment volume was at €665 million, almost 40% of the volume of the whole 2010, and more than in the entire 2009. Poland accounts for over one-third volume (ca 35%) of the entire volume in Central-Eastern Europe.
The industrial sector has reached equilibrium across central Europe, according to a research report published by Cushman & Wakefield.
Whilst it is wrong to suggest that the financial crisis is the only factor to negatively impact on the Bulgarian office market, companies have without doubt slowed down expansion programmes for Bulgaria, and this has had an adverse effect on the office market.