According to new research, Europe’s commercial property market is on the rise and is in better shape than at any given time since the financial crisis. The Eurozone has shown significant growth for the first time in years, creating economic stability for UK, Germany, France and the Netherlands.
Commercial property experts Knight Frank has recently appointed a new European Capital Markets Board who are optimistic for the future of real estate among European countries, despite the turbulence experienced since the Brexit vote.
Andrew Sim, head of the Global Capital Markets at Knight Frank has commented that:
‘The Eurozone is showing good economic growth for the first time since the global financial crisis and despite the uncertainty over the Brexit negotiations, the UK is experiencing record low levels of unemployment’.
The tech and creative sectors hold dominance in London, as confidence soars with the number of offices rented increasing in the first half of 2017 compared to the first half of 2016. London continues to act as the most active investment market in Europe, as prices rose to pre-referendum levels despite the ambiguity of what Brexit would hold.
Andrew Sim further commented:
‘We expect an increase in activity as the prospect of a two or three-year transitional deal for Britain when leaving the European Union sinks in, leaving more and more investors expecting the return of the London capital markets status quo.’
Across the pond, offices in Germany have reached a peak, with central business districts experiencing record levels with a record demand for office space, which has in turn sparked demand. Hanns-Joachim Fredrich, head of Capital Markets Germany at Knight Frank has commented that ‘investment into Frankfurt has significantly increased due to the ongoing Brexit discussions, however a lack of suitable product is hindering its deployment.’ And it’s not only commercial property estates such as offices benefiting, but hotels, residential and healthcare too, due to the high investor demand for Germany’s top seven cities, shortage remains low. Fredrich goes onto explaining that ‘most office developments are pre-let two or three years before completion’.
France has seen a growing demand from overseas investors, which has been elevated by the election of President Emmanuel Macron. Vincent Bollaert, Knight Frank’s head of Capital Markets has identified that ‘there is belief, momentum and activity, with the vacancy rate on Paris’s Ile de France falling sharply to now sit at 6.6%. In the central business district vacancy rates are now 3.1%.’