Germany and the UK will have the most promising commercial real estate markets in Europe in 2017, according to a study by Colliers International.
Colliers’ European Investment Market Outlook, which ranked European commercial property markets based on their stability, growth and yield, said that there is continued competition for real estate, with global funds under management totalling $4.9tn so far this year.
The Nordic markets were ranked first for European stability, ahead of major players like Germany, the UK and France, which could face years of political volatility.
However, the study said Finland, the Netherlands and Belgium had the “most promising” balance between risk and return as the Nordics’ stability led to low yields.
Germany and the UK headed the list for investors looking for long-term demand and growth based on GDP, employment and demographic change, while yield-hungry investors have started expanding into Central and Eastern Europe.
Richard Divall, head of EMEA cross-border capital markets at Colliers International, said: “The next three months is set to be a landmark time for Europe and with the markets anticipating the unexpected, perspectives for early 2017 could well change again.
“Equally, parts of Europe still have to manage out a significant legacy of bad debt, with a number of banks at risk of failing, including Deutsche Bank and Monte dei Paschi si Siena. The impact of these banks failing, or requiring a bail-in or out, could significantly adjust the outlook for markets, particularly for Italy.”
| Country | Politics rank | Macro rank | Demographic rank | Stability & growth rank |
|---|---|---|---|---|
| Germany | 8 | 1 | 5 | 1 |
| United Kingdom | 9 | 3 | 2 | 2 |
| France | 11 | 2 | 3 | 3 |
| Netherlands | 6 | 7 | 8 | 4 |
| Sweden | 2 | 10 | 11 | 5 |
| Norway | 1 | 12 | 16 | 6 |
| Switzerland | 3 | 13 | 13 | 7 |
| Spain | 19 | 4 | 7 | 10 |
| Belgium | 10 | 11 | 10 | 12 |
| Italy | 20 | 5 | 6 | 14 |
| Austria | 7 | 14 | 15 | 11 |
| Poland | 17 | 8 | 9 | 16 |
| Finland | 4 | 18 | 21 | 8 |
| Ireland | 13 | 9 | 18 | 13 |
| Turkey | 27 | 6 | 1 | 19 |
| Denmark | 5 | 19 | 22 | 9 |
| Czech Republic | 14 | 15 | 23 | 15 |
| Slovakia | 15 | 16 | 24 | 18 |
| Portugal | 21 | 22 | 14 | 22 |
| Romania | 22 | 20 | 17 | 23 |
| Estonia | 12 | 29 | 28 | 17 |
| Russia | 29 | 26 | 4 | 28 |
| Greece | 26 | 17 | 19 | 27 |
| Lithuania | 16 | 25 | 30 | 20 |
| Croatia | 23 | 21 | 25 | 24 |
| Hungary | 25 | 24 | 20 | 26 |
| Latvia | 18 | 27 | 29 | 21 |
| Bulgaria | 24 | 23 | 26 | 25 |
| Ukraine | 30 | 30 | 12 | 30 |
| Serbia | 28 | 28 | 27 | 29 |
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