The CBRE 2018 Europe Real Estate Market Outlook provides insight on the key trends our experts think will affect the European property industry over the next 12 months.
- Positive economic environment for most of Europe through 2018 to 2019.
- The prospect of higher long-term interest rates will start to pose a challenge to property pricing.
- Continued strong growth in assets under management will put pressure on investors to deploy capital.
- Another strong year for office-based employment growth in 2018.
- Growth in appetite for flexible offices will permeate across European markets.
- Retailers increasingly focused on getting their city strategy correct. This will support rental growth at the prime end of the market.
- Very strong demand growth has cut the availability of large-scale modern space, producing capacity constraints in some of the main European logistic hubs. Coupled with strong e-commerce relate growth this will support further rental increase.
- The evolution of the residential sector will be supported by the sheer quantity of capital available for real estate investment in 2018, increasingly through development in order to build scale.
- Stock shortages and premium pricing in gateway cities for the hotel sector will encourage investors to look further afield at secondary and niche opportunities.
- A key feature in 2018 will be operator consolidation across Europe in the alternatives sector. This will present real estate investors with new partnership opportunities as well as enhancing covenant strength.