Nery Alaev

Investment, office markets in Europe benefitting from recovery

Nery Alaev writes about real estate markets in Europe.

Research carried out by a major European bank has showed that a fall in unemployment and growth in prosperity across the Eurozone has helped to increase investment in the region.

Growth has been notoriously sluggish in the continent, so news about growth and stability is positive for the region. I’ve decided to look further into the news.

Powerful growth

Nery Alaev

Berlin is mentioned in the report

Research from BNP Paribas found that in the first quarter of this year, total investment volume amounted to €253bn – up 8% on the same period in 2015. Offices kept their position as an investor favourite with a share of 45%, rising to €113bn (+7%). Investment in retail rose too, just under 20%.

It seems that Europe’s core markets, such as the UK (currently debating its EU membership, as I’ve previously covered), France and Germany saw drops in investment whereas markets outside the continent’s core have thrived. According to Aymeric le Roux of BNP Paribas:

“Europe beyond core markets gained share, representing 40% of total European investment volume (vs. 32% in Q1 2015). Belgium, the Netherlands and the Nordics continue to enjoy rising investment activity while countries such as Spain, Italy and Ireland could not rivalled their Q1 2015 take-off.”

The comment reflects growing interest in peripheral European markets.

Demand shifts

Across Europe’s cities, changes in supply and demand have affected the markets respectively.

For example, the continuously healthy German labour market has helped to boost occupier demand especially in the capital, Berlin.

The same scenario is also apparent in major European cities such as Munich and London.

For example, in London, prime rents saw an increase over in the West End (+14%) and recorded a historic record level of growth.

In summary, it seems that economic prospects are brightening for Europe, which has suffered for most of the decade.

Nery Alaev

Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.