Real estate convictions Europe

3rd quarter 2020 and outlook

Just as the global economy was beginning to recover from its historic post-lockdown drop,

uncertainty surged with the enacting of tougher measures to slow the spread of new Covid-19 infections in many countries. However, a major turn in fighting the pandemic may have occurred with the announcement early this month by Pfizer and BioNtech regarding the likely efficacy of their vaccine candidate, which is currently in phase 3, the last stage before certification. For the moment, the latest projections are for a 4.4% global contraction in 2020, slightly better than expected, thanks to the strength of the recovery after the lockdown and during the third quarter. But pandemic uncertainties in the fourth quarter of 2020 could undermine the recovery in 2021 (projected at +5.2%).

With 160 billion euros invested in the first nine months in 2020 (-19% year-on-year), including 99 billion euros in the euro zone (-22%), the European commercial property market* did shrink but is still above its 10-year average. This shows that it remains attractive in the long term. Germany (41 billion euros, -2% year-on-year) is a resilient market; France (21 billion euros, -23%), the Netherlands and Belgium (15 billion euros, -25%) are still far above their 10-year average; and while Spain (6 billion euros, -51%) and Italy (5 billion euros, -34%) have dropped precipitously. On the whole, most prime office, residential and healthcare yields were stable between the second and third quarter 2020. Second-generation shopping centres and retail parks continued to widen but at a slower pace than previously. High street shops have been mostly spared, especially in prime locations of large metropolitan areas. Lastly, after a correction early in the pandemic and during the second quarter, hotel yields levelled off in the third quarter 2020.

* Commercial property means offices, retail shops, logistics, real-estate services
and residential property for institutional investors.
Source of quantified data: CBRE, RCA, Oxford Economics.

Read the note

Couverture Note Marché immobilier europe bureaux commerce résidentiel santé hôtel

The team

Daniel While
Daniel While Research, Strategy & Sustainability Director

Henry-Aurélien Natter
Henry-Aurélien Natter Research Manager

Adrien Isidore
Adrien Isidore Economist Statistician

You may also like

Real estate convictions: Europe in the 2nd quarter of 2021
  • Market review

Real estate convictions: Europe in the 2nd quarter of 2021

26/05/2021 By Henry-Aurélien Natter

More than a year after the start of the Covid 19 pandemic, around EUR 115 billion were invested in commercial real estate in the first half of 2021, again confirming the relatively good resilience of this asset class. The dynamics differ both between European countries and between the asset classes we examine in this publication: we’ll take a closer look at office, retail, residential, healthcare and hotels, in all of which we’ll also highlight the outlook the respective asset class.

Read the study
Real estate convictions: Europe in the 1st quarter of 2021
  • Market review

Real estate convictions: Europe in the 1st quarter of 2021

26/05/2021 By Henry-Aurélien Natter

With €50bn invested in Q1 2021, the European commercial property market is declining due to the caution of investors.

Read the study
Real estate convictions Europe : 2020 outcome
  • Market review

Real estate convictions Europe : 2020 outcome

11/02/2021 By Henry-Aurélien Natter

Marked by the Covid-19 pandemic, 2020 caused a violent and unexpected recession in global economic activity. Focus on real estate markets.

Read the note