Several European commercial property markets are reporting rental growth and growing investor appetite across all property sectors in the first quarter of 2014. There has been a strong increase in investment activity across Europe in the past six months, according to the results of CBRE’s latest quarterly survey of EMEA prime rents and yields.
Demand for European commercial property continues at a brisk pace this year, which is reflected by the tightening of prime yields across all sectors during the first three months of the year, according to Richard Holberton, the Senior Director, EMEA Research, CBRE.
He explains that the drop in yields in the first quarter of 2014 has been particularly noticeable in markets which are closely linked with the eurozone crisis including Greece, Ireland, Portugal and Spain.
He points out that while no one is announcing the arrival of widespread economic recovery in the region yet, confidence is growing. Overseas investors are increasingly prepared to look beyond what has been referred to as “safe haven” markets and consider opportunities that were considered out of favour as recently as last year.
High street retail, industrial, and office indices grew slightly by just 0.3 per cent in the first quarter of the year. Shopping centre rents were down slightly (0.1 per cent) in the same period.
Prime rents in many of the office markets have stabilised at the bottom of the cycle; they are expected to return to a growth pattern in the second half of the year.
In London, City and West End rents continued their upward momentum, increasing by 1.7 per cent and 5.0 per cent respectively.
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