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 Head of Research

You may also like

Real Estate Convictions Europe : 2nd quarter 2023
  • Market review

Real Estate Convictions Europe : 2nd quarter 2023

07/09/2023 By Henry-Aurélien Natter

Although some economies contracted towards the middle of the year, global growth could prove more resilient than predicted over 2023 as a whole. Despite continued high levels of uncertainty, several positive factors for the economy have emerged.

Read more
Real Estate Convictions Europe : 1st quarter 2023
  • Market review

Real Estate Convictions Europe : 1st quarter 2023

16/05/2023 By Henry-Aurélien Natter

The unexpected resilience of the European economy has led to an improvement in the business perspectives for 2023. However, the ECB has once again chosen to increase its interest rates to limit the impact of inflation, which is expected to decrease by the end of the year.

Read more
Real Estate convictions Europe : 4th quarter 2022
  • Market review

Real Estate convictions Europe : 4th quarter 2022

23/02/2023 By Henry-Aurélien Natter

2022 saw a more pronounced than expected global slowdown, due to Russia’s invasion of Ukraine, rising inflation, a tightening of financial conditions and the persistence of the Covid-19 pandemic in China.

Read more