Berlin, Amsterdam, Frankfurt and Madrid continue to be the most attractive European cities for commercial property investors, according to the latest RICS Commercial Property Monitor.
RICS’ monitor has also picked up a possibility that more investors may also be looking at Central and Eastern European locations such as Sofia, Budapest and Prague.
The land property and construction professional standards body says that European markets registered the strongest performance in both its investment and occupier sentiment barometers during the last quarter of 2017.
Contributors to the survey from European cities have, however, consistently highlighted a lack of supply of good quality property with vacancy rates in the office sector now at their lowest level since 2008. RICS says that this is clearly underpinning the high pricing in the more expensive markets. It also points out that low vacancy rates may partly explain why investors are relatively sanguine at the prospect of a shift in the direction of monetary policy from the ECB as the year develops.
“Sentiment remains generally upbeat across the majority of real estate markets covered by the survey, but European cities continue to take the lead,” says Simon Rubinsohn, RICS chief economist.
“The positive mood music is also reflected in the forward-looking indicators, most visibly in the readings for expectations 12 months out. Concern around valuations does persist in several markets but even where this is the case, there is little sense from respondents of a material correction in pricing anytime soon.”
