19. Mai 2010 
Print
Print
Values & volumes rising as the commercial property market heats up
However recent economic data actually points to the recovery picking up in many areas and with interest rates set to remain low, we seem to be in a very supportive environment for property. In fact, looking at the prime market, those who fear that yields may be correcting too rapidly given the health of occupier markets, may be under-estimating the speed with which rents are stablising and more particularly are failing to appreciate the impact of the huge increase in investment liquidity produced by central bank and government intervention as well as low interest rates. A combination of gradually easing financing conditions and a better macro outlook will support a further hardening of yields as 2010 progresses, with our currnet estimate increased to a 50-60 basis point fall overall. “
Rhydderch added, “We continue to expect a strong outturn for trading volumes this year, with activity increasing around 50% to €110bn. Europe’s three largest markets, the UK, Germany and France, will see the bulk of this but other larger western markets will be buoyant, such as Italy and the Netherlands. The Nordics will see growing interest, led by Sweden and Norway, while Central Europe is being viewed in a new light by some and Emerging markets are also likely to come back into favour, with Turkey at the forefront but Russia a strong bet for opportunistic players”.
Income and income growth will be of growing importance as the year progresses, yields fall back and interest rate increases draw closer, although with the tightening monetary cycle starting first in emerging markets in Asia and Latin America, emerging European markets may in fact be relatively more favoured later this year.
However, while prime values look likely to bounce further, Rhydderch warns “Not all areas of the market will rise on the coat tails of prime. Investment demand for the best space is running ahead of supply and the same will be true for occupier markets in the not too distant future. In many parts of the secondary market however, supply is greater than demand from either occupiers or investors and as a result the pricing correction for secondary is not over yet.”
Rhydderch added, “We continue to expect a strong outturn for trading volumes this year, with activity increasing around 50% to €110bn. Europe’s three largest markets, the UK, Germany and France, will see the bulk of this but other larger western markets will be buoyant, such as Italy and the Netherlands. The Nordics will see growing interest, led by Sweden and Norway, while Central Europe is being viewed in a new light by some and Emerging markets are also likely to come back into favour, with Turkey at the forefront but Russia a strong bet for opportunistic players”.
Income and income growth will be of growing importance as the year progresses, yields fall back and interest rate increases draw closer, although with the tightening monetary cycle starting first in emerging markets in Asia and Latin America, emerging European markets may in fact be relatively more favoured later this year.
However, while prime values look likely to bounce further, Rhydderch warns “Not all areas of the market will rise on the coat tails of prime. Investment demand for the best space is running ahead of supply and the same will be true for occupier markets in the not too distant future. In many parts of the secondary market however, supply is greater than demand from either occupiers or investors and as a result the pricing correction for secondary is not over yet.”
Previous Page
