AEW 2020 European Outlook: Bad headlines can mean good news for property

Despite worsening global economic growth and business confidence, AEW’s 2020 European Outlook report highlights that the outlook for property has improved. In reaction to declining business confidence and slowing economic growth, central banks cut interest rates, pushing bond yields lower for longer. In turn, these lower-for-longer bond yields are expected to keep property yields more stable than previously expected. AEW has found that more than 80 of the 100 markets assessed are attractive or neutral. This is a significant improvement from half of the 90 markets covered last year. 

While lower economic growth is expected to limit rental increases, the positive effect of lower-for-longer property yields more than offsets this negative income impact. The degree of this change varies across markets but is generally positive. AEW’s detailed approach of 100 market segments (which ar