Following an exceptional quarter of investment into European property, where transactional volumes reached the highest level since 2008, values across the Continent have stabilized in Q1 2013, according to new data from CBRE’s European Valuation Monitor. A rise in investor activity across Europe highlighted that vendor and purchaser expectations are becoming more aligned.
Notably prime logistics properties have recorded aggregate yield compression over the past five quarters and the projected growth of e-commerce, as well as strong demand from investors and attractive retention rates means logistics is set to continue to perform well over the next 12 months. Office values are polarized according to local markets, and Southern Europe & Ireland and the Netherlands were worst affected by a fall in values (decreasing by 3.2% and 2.4% respectively).
France produced good growth over the first quarter of this year, with property values across all sectors increasing by 0.3%. Values in Southern Europe & Ireland have been adversely affected by Italy’s poor performance, whilst Germany, the UK, the Nordics and CEE recorded only a marginal decline.
Andrew Barber, Senior Director, Valuation Advisory, CBRE said: “We are seeing key themes emerging; first, growing polarization in the market between the performance of prime/core and poor secondary/tertiary; secondly, a clear north/south divide and lastly strong investor appetite for the logistics sector.
"There is no doubt that investor sentiment is improving, and encouragingly we are now seeing more purchasers’ expectations match prices sought by vendors. The rate of decline in capital values in most European countries is slowing and, in selected cases, such as France and Central and Eastern Europe, this quarter marks the transition to achieving growth in capital values.”