In 2009, the world economy went through a deep recession. Since then, we have come a long way. The main European economies have returned to growth and forecasts continue to point to a muted average GDP growth recovery of about 2.5 percent per year over the next three years across the core European countries. In this environment, property occupier markets should also be close to their trough, and we should see investors starting to deploy capital strategically in order to benefit from the new cycle that is emerging.
This is not, however, what we are witnessing in Europe’s property investment markets, where investors and lenders are still operating in risk-aversion mode, almost exclusively focusing on core assets. In the current risk-conscious climate, however, a high level of security does not come cheap. With prime yields recovering strongly, investors appear willing to pay substantial premiums for long-dated secure income. The prevailing investment approach implies that in