European Commercial Real Estate has received unprecedented levels of inward investment over the last decade, confirming the continent’s status as a safe haven for long term institutional capital.
While Germany, the UK and France has traditionally attracted most inward investment flows, Eastern Europe, the Nordics and Southern Europe are also benefitting from commercial investment volumes. In a low interest rate environment across Europe for the foreseeable future, prime European commercial real estate will continue to offer attractive yield spreads for investors seeking stable income and risk adjusted returns.
Prime Central Business District (CBD) office space will continue to be attractive to occupiers as they seek to build their business brand profile and retain the best talent. Vacancy rates across Europe are at an all-time low, and rents are expected to rise steadily in the foreseeable future owing to a significant shortage of quality prime office space and robust institutional demand.
As pricing pressure encourages investors to seek new underserved markets, key second tier cities across Europe are increasingly offering good value. Eastern Europe for example, enjoys an educated yet relatively cheap workforce, and new business hubs are fast emerging for new entrants into the office market seeking higher returns and growth.
Fundamental market trends such as flexible and shared workspace, increasing use of technology and the growth of self-employment are also redefining the traditional office workspace. Cities such as Paris, London and Berlin have adapted and quickly to offer flexible solutions and other cities across Europe will continue to follow suit. These shifts in working practices and new commercial solutions will offer investors a growing pipeline of investment opportunities and diversification in the foreseeable future. Key-Vest offers investors access to institutional grade commercial investment opportunities across Europe. Click here for more information.