The European real estate market wonÃ¢â¬â¢t recover until 2006. This is the expectation of Kempen & CoÃ¢â¬â¢s real estate analysts. According to them, the years 2003 and 2004 will not yet lead to a substantial decline of the figures of empty standing in the larger European cities. The analysts also see a split in low and high quality real estate, where only the latter will have an increase in value.
This can be concluded from the newest edition of Compass (end of May 2003) by Kempen & Co regarding the direct and indirect real estate market. In the previous edition of Compass (November 2002) the analystteam predicted a recovery at the end of 2004.
Compass describes a quickly deteriorating direct European officemarket. Not only have the figures of empty standing offices increased: from 4% in Barcelona to 14% in Stockholm (Compass November showed 0.6% in Munich to 6.8% in Brussels), also the rents are falling down. In the past twelve months rents in Oslo have decreased with 27% while Brussels showed an increase of 10%. In the November edition that was still Ã¢â¬"16% in Madrid to +14% in Milan.
Furthermore the analysts see an increasing gap between highly and low qualified real estate. Highly qualified real estate (Ã¢â¬ËA-gradeÃ¢â¬â¢) with stable lessees and long-lasting let contracts is still scarce. This type of real estate saw an increase of its value over the past twelve months with 2.5%. Worse real estate (Ã¢â¬ËB-gradeÃ¢â¬â¢) lost approx. 5% of its value in the past year.
Source: Financieel Dagblad