Infographic: five headwinds to a European commercial real estate recovery
Recent European valuations data from MSCI for Q2 confirmed that capital values are still falling, but at a slower pace than they were last winter. This raises the question as to whether we have reached a turning point in this downturn? Do we expect capital values to start their recovery imminently, or is it still too soon to claim that we are now out of the woods?
What you will learn:
- Our view is that it is too soon to declare a recovery, but things are looking better than before the summer.
- We still expect all-property values to decline 11% this year in Germany and 7% in France, with less of a drop in the UK, at around 5%, because of the larger correction last year.
- We contend that there are five key reasons why valuations won’t recovery strongly in the near term: tight credit conditions this year, record-low sentiment from investors, high debt costs, inadequate risk premia, stagnant economy in the near term.
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