CONV IMMO EUROPE Octobre 2019 - header

Real estate convictions: Europe in the 3rd quarter of 2019

CONV IMMO EUROPE Octobre 2019 - pétale

Although uncertainties and nervousness are increasing, real estate seems to be a reassuring pocket of stability.

To support the economy, The European Central Bank(BCE) has remained very accommodating by pursuing its policy of low rates. Thus, at the end of the third quarter of 2019, the States able to borrow at negative rates increased in number, as Germany joined France, the Netherlands, Finland, Belgium and Austria, while Italy, Spain, Portugal and Greece remained in positive territory.

This low-rate lending policy mechanically strengthens the risk premium in favour of real estate. With over €180bn investment over nine months in 2019, €115bn of which for the Eurozone alone, the European commercial real estate market has again attracted capital. The United Kingdom continues to materialise a certain defiance of investors owing to Brexit (€35bn** in Q3 2019, -27%). Germany recorded a fall in its investments (€40bn in Q3 2019, -10%) owing to a shortage of available products and prices becoming increasingly higher on certain asset types.

Carried by its domestic economy, France remains a flagship destination for foreign capital and registered good momentum of investment volume (€23bn** in Q3 2019, +19%).

Henry-Aurélien Natter, Research Manager at Primonial REIM, reviews the different markets.

**Commercial real estate designates offices, shops, logistics, services real estate and residential property targeted at institutional firms

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Henry-Aurélien Natter Research Manager

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