The commercial real estate industry contributes around 2.5% to the total economy of Europe more than the automotive, telecommunications and banking industries according to new research commissioned by the European Association for Investors in Non-listed Real Estate Vehicles (INREV) and the European Public Real Estate Association (EPRA).
While other studies have shown that real estate in all forms accounts for nearly 20% of total economic activity, the new study reveals that the commercial property sector alone generated 285 billion for the European economy in 2011 and employs over 4 million people.
The independent report, entitled, Real Estate in the Real Economy, was designed to help national governments across Europe, officials in the European Commission and Members of the European Parliament better understand the scale and importance of the industry in supporting growth, jobs and sustainability. It provides a useful Europe-wide perspective on the sector, for the first time. Historically, data relating to the economic significance of the commercial real estate sector has only been collected at a national level, and often in an inconsistent manner.
Where individual national measures of GDP reflect the real estate market, they generally incorporate the commercial sector within a very broad calculation. In the UK, for example, real estate statistics include all economic activity related to the construction and sales of owner-occupied residential property.
Real Estate in the Real Economy focuses entirely on activity in the commercial sector including retail, offices, non owner-occupied residential, and warehousing and industrial. This means there is now an accurate measure of the specific contribution this important sector makes to the wider economy.
"This report provides a very useful snapshot and reference point. We've long needed comprehensive, independent data that demonstrate the hugely positive impact that commercial real estate has on the national economies and individual lives of people around Europe," said Jeff Rupp, Director, Public Affairs, INREV.
The report was written by Paul Mitchell a respected economist and independent researcher, as well as a specialist in European commercial real estate. It draws on data from a number of sources, including ECB, OECD, and Eurostat.
"We can see clearly from this report that our industry is an economic powerhouse delivering jobs and economic growth through the ownership, management and delivery of the built environment," added Gareth Lewis Finance Director, EPRA.
As part of their joint efforts to raise policy makers' awareness about the importance of the commercial real estate industry, INREV and EPRA have also spearheaded the creation of a new alliance of property associations.
The informal group is being established to improve coordination on a European level. It aims to support the policymaking process affecting European commercial real estate by improving knowledge and understanding of the sector.
Source: Firstlight PR