CBRE Reports Continued Improvement in European Property Values Across West Europe in Q3
London, 19 November 2010 –European property values continued to show improvement during the third quarter of 2010, particularly in core Western Europe, according to the latest European Evaluation Monitor by CB Richard Ellis (CBRE). The report indicates that since the European market posted its first positive quarterly movement in Q2 2010, prime yields have continued to fall across Europe, with a strong performance of prime assets in core markets. Year-on-year, pan-Europe values improved 2 per cent, leaving them 19 per cent below the level of Q4 2007.
All regions covered posted positive figures in the quarter, with the exception of Greece, Portugal and Ireland, as well as weak results of offices in the Netherlands. Elsewhere on the continent, positive changes were reported in Spain and Italy. A number of recent transactions in Germany are believed to translate into positive Q4 change, although in Q3 no change was recorded.
Retail was again Europe’s best performing sector for five consecutive quarters, significantly outperforming other sectors since Q4 2007. The strongest performing market region over the quarter was the UK, which recorded capital growth of 1 per cent. France led the non-UK markets with 0.8% growth, followed by CEE which was driven by a strong performance by Poland.
Andrew Barber, Senior Director of International Investment Valuation at CB Richard Ellis, said: “We continue to witness increased polarisation between prime and secondary assets. Investor demand for prime product continues to drive yields down in much of core Western Europe, but notably in France and Germany.
We are seeing renewed interest in the Nordics - especially Sweden, and in CEE, albeit much of the focus remains on Poland, leading to capital growth in these markets; driven mainly by yield compression.”
The CBRE European Valuation Monitor is based on quarterly fund valuations carried out by CBRE and designed to enhance transparency by providing a general indication of patterns of value change in the European property market. This is the fourth report in the series since it was launched in Q4 2009.