In­vest­ments in real es­tate con­tinue to boom in Europe

Financial Mirror (Cyprus) - - FRONT PAGE -

Con­fi­dence in the real es­tate sec­tor is im­prov­ing around the world, but most no­tably in EU mar­kets, where in­vestors’ de­mand is grow­ing, ac­cord­ing to prop­erty pro­fes­sion­als re­spond­ing to the lat­est RICS Global Com­mer­cial Prop­erty Mon­i­tor. Dur­ing the third quar­ter of 2016, in­vest­ment de­mand for com­mer­cial prop­erty has been par­tic­u­larly strong in a num­ber of Euro­pean cities, in­clud­ing Mu­nich, Frank­furt, Ber­lin, Madrid and Bu­dapest, sup­ported by good eco­nomic con­di­tions and ben­e­fit­ing from the ac­tions of the Euro­pean Cen­tral Bank, which has been in­ject­ing a large amount of liq­uid­ity into the econ­omy. Cap­i­tal val­ues are ex­pected to re­main ro­bust across the EU in the com­ing twelve months.

Look­ing at the oc­cu­pier side, RICS in­di­ca­tors shows the best re­sults in Hun­gary, with oc­cu­pier de­mand grow­ing in the of­fice, in­dus­trial and re­tail sec­tors for the fourth con­sec­u­tive quar­ter. RICS an­tic­i­pates rents in this coun­try will be pushed higher in the com­ing months, es­pe­cially across prime as­sets.

Strong ac­tiv­ity in the oc­cu­pier mar­ket and rental growth is also ex­pected dur­ing the year ahead in Ire­land, Ger­many, Spain, as well as in Bul­garia, Ro­ma­nia and France.

In Switzer­land, de­mand from both do­mes­tic and for­eign in­vestors was flat over Q3 at the all-sec­tor level, al­most mir­ror­ing the trend re­ported in the pre­vi­ous quar­ter

In the UK and es­pe­cially in London, where sen­ti­ment dipped in the im­me­di­ate af­ter­math of the EU ref­er­en­dum, the mar­ket ap­peared to have set­tled down dur­ing Q3 and ex­pec­ta­tions point to lit­tle change in the short term. How­ever, a large num­ber of re­spon­dents in­ter­viewed across Europe have seen ev­i­dence of firms look­ing to re­lo­cate some parts of their busi­ness away from the UK, in re­sponse to the Brexit vote. Over 30% of re­spon­dents in Poland, Ger­many and Ire­land have al­ready re­ceived en­quiries from com­pa­nies to re­lo­cate abroad since the vote in June, and at a lower scale also re­spon­dents in Spain, The Nether­lands and France. Ex­pec­ta­tions about see­ing some new ac­tiv­ity due to re­lo­ca­tion of busi­nesses over the next two years par­tic­u­larly high in the cities of Ber­lin and Frank­furt.

In the rest of the world, sen­ti­ment is also very pos­i­tive in New Zealand and in In­dia. How­ever, the neg­a­tive mar­ket out­look across cer­tain parts of Asia and the Mid­dle East, re­flect the chal­leng­ing macro back­drop.


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