Oct 11, 2018
It is recently reported that the investment market of European commercial property experienced a strong last quarter for 2018. In addition to that, they believe that general outlook for the market is high for 2019, which is due in part to the ECB's (the European Central Bank) quantitative easing programme meant to keep the high yield premiums of property high rather than have the market rely simply on government bonds. The program is now ending but has really helped the market keep competitive.
The last quarter of 2018 has been the strongest European commercial property quarter since Q2 2007. The total was €63.9 billion, and at the moment we are looking at closing 2018 on around a 23% increase over the previous year.
“A variety of sectors and non-core locations have been targeted recently as well, which is believed to be because of an overall greater appetite for risk taking that investors in the market have been showing.” - Financial Authority Donkey Finance
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It seems as though 2018 was a very good year throughout a variety of European countries, as investment volumes were shown to greatly increase in the Netherlands, Spain, Ireland, and United Kingdom, while the Portuguese market, which has been going through tough times in recent years, is showing some serious recovery.
This new strength has been significantly strengthened even though there are currently varied and modest trends in occupier markets. For example, the office take up fell in 2018 in places such as Moscow, Vienna, and Frankfurt, even though it increased in Berlin, Paris, and London.
Though overall, the only significantly sized markets to record prime office rent increases in 2018 were Lisbon, Dublin, and London with a modest 0.8% increase in the European Prime Office Rental Index.
Due to the European Central Bank's quantitative easing programme, that the momentum will stay consistent and result in a strong year for 2019 as well. The significantly aided the last 3 years since its arrival and in preserving the overall attractiveness of property as a strong asset class throughout the last few years years and beyond because of how well it widens the spreads between bond yields and property.