Germany Leads European Commercial Property Market

Given the widely publicized struggle seen across much of the Eurozone it may be no surprise to find that Germany is leading in the European commercial property market. …

Given the widely publicized struggle seen across much of the Eurozone it may be no surprise to find that Germany is leading in the European commercial property market. The Royal Institution of Chartered Surveyors has named Germany and Russia as the top performers in the market in terms of investment demand, sales activity and sentiment, but many experts wonder how long Germany can withstand the external downward pressures exerted by its neighbors. The Eurozone crisis has impacted the wider global real estate market, although North America, Canada and much of the Asian market continues to stabilize. For more on this continue reading the following article from Property Wire.

Germany and Russia as the top performing European real estate markets in the second quarter of 2012, according to the latest  commercial property surveys from the Royal Institution of Chartered Surveyors.

However, RICS sees expectations for Germany improving at a more modest pace in comparison to previous quarters. Indeed, the crisis in the eurozone is now raising concerns as to whether the German economy and its real estate market can continue to buck the more gloomy picture pervading much of the rest of Europe.

The survey indicates that signs of stress are spreading from the periphery to other markets. Greece, Spain, Ireland, Portugal, France and Italy in particular showed signs of distress during this quarter of the year, with both sentiment and activity levels suffering on the back of elevated uncertainty.

Russia and France saw available space continue to rise whilst in Russia occupier demand continued to increase, albeit at a slower pace, in France occupier demand declined.

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Poland’s absence from the top of the rankings is notable and comes on the back of sub-par economic growth performance. Available space continues to increase which the report says is contributing to a slightly softer rental picture.

Developments in Europe’s investment market also took a slight turn for the worse, with only six countries recording increases in investment demand and only Germany reporting positive capital value expectations compared to four previously.

The investment market in Poland, influenced by the weakness of its zloty, lost momentum with enquiries and capital value expectations easing a little following a couple of years of strong gains.

With respondents acting more cautiously in both the occupier and investment markets, expectations for the eurozone are even gloomier for the third quarter of the year.

In the rest of the world, following on from strong first quarter results, the commercial real estate market in North America and Canada has maintained its more positive mood in both occupier and investor markets despite the global economic slowdown. China and Hong Kong also appear to have relatively resilient occupier markets for the time being.

‘The re-emergence of the euro crisis allied to generally weaker economic numbers has clearly taken its toll on much of the real estate world. It remains to be seen whether they can continue to buck the more gloomy trend if the macro data remains disappointing,’ said Simon Rubinsohn, RICS chief economist.

‘Recent actions from central banks in Europe provide some reason for encouragement but more stimulus may be needed to ensure the global economy can steer a path through the increasingly choppy waters,’ he added.

This article was republished with permission from Property Wire.


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