Marktbericht Europa Jan09

European real estate markets are now facing their most difficult trading conditions

Executive Summary

• Investment activity in commercial real estate fell sharply in 4Q08, leading to unprecedented declines in property values.
  
• How commercial banks will deal with their exposure to real estate debt is uncertain, and represents a key variable to performance in 2009. The shortfall of available debt could produce distress among property owners.
  
• Public real estate equities are struggling amid deteriorating property market fundamentals and sharply higher volatility in the broader equity markets.
  
• Rental growth, if not negative, is slowing and will likely continue to do so throughout 2009. Rising vacancy rates serves to shift the balance of power from landlords to tenants.