European commercial property peaks above 2007 level

DTZ’s annual report, Money into Property, has been released, and shows that the value of European commercial property investment stock has overtaken its previous peak of 2007. The increase of 3% in found European invested stock was sufficient to achieve the new record of €3.4 trillion. 

Within the European market, Turkey experienced the greatest increase in stock value of 30%, although the initial base was relatively low. 

Of the remaining top ten countries, northern Europe was present, in the form of Finland and Norway, at 15% and 12% growth respectively. 

Yet the report also demonstrates another side to European commercial property markets; of the ten bottom countries for growth, nine were in Europe. These include Russia, Spain, and even the UK at -25%, all of whose stock value decreased. Russia’s reduction was -19% as a result of the current political situation and imposed economic sanctions. 

The report showed that of the €3.4 trillion over half is constituted of debt, at €1.8 trillion. Debt has been reduced in Spain, at -11%, although debt has grown in France (1%) and Sweden (3%). 

Globally, investment volumes grew to €557 billion by the end of last year, 20% up on 2013. A continued increase in investment throughout 2015 is predicted to reach €678 billion while global low interest rates are expected to lead to commercial property investment continuing throughout 2016. The report noted that London attracted the largest amount of investment in terms of deals over €18 million, at €31 billion.

The report also surveyed investors as to their views on the present and future market, with the risks of deflation and Chinese slowdown emerging as factors to consider in terms of global commercial property investment growth rates.  

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