European MarketBeat Snapshots (Sector Bundles) Q2 2015 - Cushman & Wakefield

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European MarketBeat Snapshots (Sector Bundles) Q2 2015

The European MarketBeat Snapshots are brief summaries of the office, retail, industrial and economic sectors in Europe's markets. They provide commentary on recent sector trends, display current market data and analyse the impacts on commercial real estate. For your convenience, our European MarketBeat Snapshots have been bundled by sector, allowing for easy access and understanding of what is driving Europe's key markets for each real estate and economic sector.

What do our industry experts have to say about the European commercial property market performance in Q2 2015?

RETAIL:


"The European retail market performed robustly in H1 2015, but early indications suggest that letting volumes will be even stronger in the second half of 2015, with high demand being seen from both domestic and international retailers, especially in core Western European markets. Occupier sentiment is strengthening in the fast recovering peripheral Eurozone markets such as Spain, Portugal and Ireland, with several new brands and new innovative concepts by international retail groups such as Sonae and Auchan entering the market recently. Retail investment markets are also strong, and while there is still a focus on core opportunities in the biggest cities, there is growing appetite for secondary assets and markets driven investor total return targets, and the vast majority of European markets are now liquid."

Justin Taylor, Head of EMEA Retail

OFFICES:


“The positive momentum seen in the European office market over the last twelve months persevered in Q2. The stronger performing markets – such as London, Stockholm and Dublin – are seeing supply-led recoveries, while growth in certain Southern European markets is being supported by economic recovery that has helped to fortify occupier demand. To the East, however, while Russia in particular continues to see activity, this is typically accounted for by the replacement of space rather than new market entrants. Greece is attracting a lot of media attention at the moment as the economic situation plays out; however, there has been some reprieve with the offering of a third bailout, although a return to a balanced real estate market is some way off.”

Richard Middleton, Head of Occupier Services EMEA & APAC

INDUSTRIAL:


“Growth in European logistic rents remained volatile during Q2, with declines in the East mot notably occurring in Russia and Ukraine – a sign of oversupply and weak demand. In contrast, the West continued to witness some upwards pressure on rental values, with occupier demand outpacing the much more restricted supply pipeline. The lack of larger, well-located and modern floorplates in key logistics hotspots such as France, Spain, the Nordics and the UK has restricted increased letting volumes. As ongoing socioeconomic concerns persist, developers are cautious in building speculatively, and thus build-to-suit options thus remain the most viable options for these tenants to find suitable supply. Meanwhile, the supply/ demand balance has strengthened the investment market, with stronger demand from both domestic and foreign buyers leading to prime yield compressions in certain markets.”

Mark Webster, Head of European Logistics & Industrial


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