Western Europe is going into a recession that may be deeper & longer than anticipated, according to King Sturge.
In a report released at MIPIM today it said the 'credit-fuelled illusion is over with a vengeance and Central & Eastern Europe will follow with a mixed outcome – some suffering worse than Western Europe'.
Angus McIntosh, partner & head of research at King Sturge said: 'Only government sectors will show positive economic growth in 2009.
'Bank interest rates remain low, but the cost and availability of debt will remain obstacles throughout 2009 and beyond. It will take until at least 2010 to unwind commercial mortgage backed securities.
It said the worst of the slide in capital values is coming to an end, but the very modest up-turn will not recover lost values in the short-term.'
McIntosh said that forced sales will push capital values lower in the short term and savvy investors, who have been watching the market, may decide to move on to buy previously out-of-reach assets.
He said by 2010 onwards most European markets will show total returns exceeding 5%, and some nearer 10%.