Marktbericht Europa Oktober 2011

The near-term outlook for European economic growth has deteriorated as governments struggle to reassure markets that they have a credible and long-term solution to the sovereign debt crisis.

Executive Summary

Macro Themes

• The near-term outlook for European economic growth has deteriorated as governments struggle to reassure markets that they have a credible and long-term solution to the sovereign debt crisis.
• We continue to expect that eurozone policymakers will deliver the necessary measures to keep the currency area intact. With governments tightening fiscal policy, central banks will likely continue whatever policy easing is required to keep the economic recovery on track.

Implications for Commercial Real Estate

• Europe’s occupier and investment markets demonstrated resilience in the third quarter, but that will be tested as heightened uncertainty persists while policymakers battle to resolve the eurozone debt crisis.
• Investment activity is set to decline in the fourth quarter. Bank lending to commercial real estate is pulling back and many cross-border investors – increasingly nervous about Europe’s growth prospects – are taking a wait-and-see approach. Investors will increasingly focus on defensive retail assets and continue to retreat to the deep, liquid markets in North Europe.
• In occupier markets, take-up of space will slow in the near term, reflecting the wider economic uncertainty. The slowdown will reverse some of the gains made across North Europe in the first half of the year, and increase the pain in peripheral markets.
• The lack of new development will persist over the coming quarters as opportunities to invest equity and debt financing remain scarce.
• Despite the potential impediments to growth, we see stronger rental growth and more investment opportunities in and around the major cities in North Europe.

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