European Commerical Real Estate attracted a record €86.8 billion of investment in Q4 2016; 5% higher than the previous record set in Q4 2015.
The total for 2016 was €251.1 billion, down 10% on 2015.
The largest investment market in Q4 was Germany with a record €19.8 billion transacted.
Of Europes top markets, the Netherlands saw the largest year-on-year growth with investment in 2016 up 17% on 2015, meanwhile the UK saw the largest contraction with 2016 investment down 37% on the previous year.
The European Hotel Investment MarketView highlights the key trends pan-Europe in terms of hotel transaction volumes, operating performance and yields. This particular issue includes a year-end round-up of 2016.
Germany topped the table for European hotel investment in 2016
European hotel investment volume was €20.4bn, down -7% on 2015
A splurge of investment activity was noted in Q4
Intra-regional investment dominated in 2016
Greatest operating performance growth noted in Central, Eastern and Southern European markets
Capital value growth recorded in most key European markets
This year’s guide is the largest and most comprehensive yet with 64 EMEA cities featured including certain global hubs such as Hong Kong, New York City and Mexico City. Throughout the guide we demonstrate how traditional office settings compare to the more wide spread application of agile working environments.
Our latest annual debt review provides comprehensive analysis of 2015’s trends and considers how and why 2016 may be different.
Our key conclusions are:
Last year, new lending doubled, rising to €127 billion based on a record €273 billion of CRE investment.
Lending margins were generally stable for bilateral lending and LTV levels stayed low, by historic standards.
Despite the rise in new debt issuance, the total value of European CRE debt in 2015 was only slightly higher than in the previous year, at €1.1 trillion, because new lending was offset by the retirement of existing debt.
NPL activity was robust. Sales were up 23% in 2015 to €85 billion.
Dry powder for loans and distressed assets is high and pressure is rising on European banks which have yet to address long-standing, non-core loan books, meaning the pace of deleveraging will continue.
Investors have become more cautious. This change in sentiment is a factor in a slowdown in 2016 investment activity and is likely to affect loan pricing.
The technology sector has been one of the strongest drivers of European office markets over recent years. In this report, we invite commercial real estate investors and technology companies to explore our insights into the location and character of tech hubs across Europe; to enhance understanding of the fundamental characteristics of tech clusters; and to identify future opportunities among highperforming, and emerging, tech cities.
Expect a year of political uncertainty and the challenge of rising interest rates in Europe in 2017
Politics aside, however, the gradual tightening of some occupier markets seen in 2016 will continue in 2017, especially for better properties in the better locations
Despite a gradual turnaround in the long-term interest rate trend, there is still scope for further yield compression in prime assets as rental growth and low interest rates by historical standards continues to make property look attractive
2018 or 2019, rather than 2017 are likely to be the years when the yield cycle starts to turn
From a real estate perspective, global gateway cities offer many benefits. Their attractiveness to people and businesses means that space demand in their commercial real estate markets increases steadily over the long term, underpinning rent growth. These cities are also highly liquid markets, where real estate investments can be readily bought and sold. We have compiled this new report so that those looking to invest in one or more of the world’s great cities can quickly and easily understand pricing and market conditions.
•There seems to be an ongoing discussion about the current pricing, the influx of foreign capital into the Danish property market and the contraction of the Danish prime yields over the last 24 months’ period.
•The performance of the Danish property market is strong, with the total 2016 investment volume expected to reach some DKK 60 billion, 25% above the 2015-level.
•Copenhagen prime office and retail yields stand at 4.10% and 3.30% respectively as at Q3 2016, the lowest levels in the last twenty years.
One perception openly held in the market is that the Nordic Region is set for significant growth with new demand, new build and new market entrants. It is believed that local and international investment, across the region will be significant as lower power costs, abundant resources of green energy, connectivity, taxation incentives, and natural cooling efficiencies present a formidable array of benefits for users.
The following is an executive review of the discussion that occurred during a breakfast hosted by CBRE on the subject of the data hosting landscape, market dynamics and demand spread across the hyper scale cloud, wholesale and retail colocation markets.
• E-commerce growth, changing consumer requirements, and a rise in automated technology are restructuring supply chains and changing the logistics landscape in Europe
• Making maximum use of a site is critical with strong pressure to store and handle as many units as possible whilst being in close proximity to core markets
• Not only can operations save on cost of land, they can also benefit from a cut in labour and transportation cost if they build vertically as opposed to outwards, or searching for cheaper space further afield
• CBRE has identified two main categories of vertical solutions likely to dominate the European logistics sector; high-bay structures and multi-level warehouses
• The uniformity of the goods handled in an operation is identified as the main factor in deciding on one of these vertical solutions
Better Never Rests
Based in Helsinki, CBRE Finland Oy focuses on providing superior services in the commercial real estate markets throughout Finland. Our professionals specialize in the sale, acquisition, leasing and valuation of offices, retail units, shopping centres, and industrial and logistics parks.
CBRE Finland Oy provides the full spectrum of property consultancy services - including investment, agency and general advice to a wide range of clients, such as national and international companies and institutional and private investors.