Commercial property market in Europe set for further growth in 2015

By: Xavier Basil
Xavier Basil
Born in Angola and brought up in Portugal, Xavier came to the iNVEZZ team via a previous career as… read more.
on Jan 26, 2015

The European commercial property market is expected to continue to grow this year, says recent research from Knight Frank. The real estate firm estimates that the volume of commercial property transactions for 2015is likely to come in the range of €175 billion to €180 billion, around 10 percent higher than last year.

The positive forecast takes into account the existing strong interest in commercial property investment opportunities across all main commercial sectors. Also, specialist sectors such as healthcare, hotels and student accommodation are becoming increasingly part of the mainstream property market, Knight Frank’s study reveals. On their coverage of the research, PropertyWire quoted Darren Yates, head of Global Capital Markets Research, as saying:

“The really good news for both occupiers and investors is that rents in most markets remain lower than their pre-recession peaks, in some cases significantly below.” Yates added: “This should provide a further boost to activity in 2015, with more occupiers looking to take advantage of good deals, while investors will seek to cash in on better rental growth prospects as the economic outlook continues to improve.”

The firm expects to see rental growth in major European cities, including Frankfurt, Milan and Madrid. The biggest rental growth is expected in the City of London. The forecast for Paris, Amsterdam, Brussels and London’s West End is for rents to remain steady.
The study also highlights a couple of encouraging trends: the pick-up in UK’s regional city markets and the rebound in some of Europe’s peripheral markets, notably Ireland and parts of Southern Europe. Knight Frank pointed to Dublin and Madrid, which recorded solid rental increases last year, and added that they are expected to see further growth in 2015.

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