In this new blog, Consorto highlights five news stories that are making headlines in the European commercial property sector this week. Our selection includes how the industry is set to recover from the pandemic, a big new office scheme in London and also follows the rise of the ‘shed masters’.
How the pandemic is affecting the European CRE sector
Summary: In a Q&A, Savills analyses what changes COVID-19 has brought about to commercial property in Europe. It says that by the second half of 2021, some investors may start moving up the risk curve, with opportunities in repriced secondary offices and also retail. It predicts investment activity will rise by around 20% during the year.
Key quote: “Retail – will disruption be the catalyst for change? 2021 could be the year when repricing reaches a point where it could begin to look interesting for buyers, whether for the current use or repurposing.”
Read the full story: https://www.savills.co.uk/research_articles/229130/309871-
New £100 million-plus offices planned in London redevelopment
Summary: Aviva Investors and developer and design specialist Sellar are to co-develop a prime office campus at London Southbank. They have bought two adjacent sites at Bermondsey Street and will commit more than £100 million to the scheme which is called ‘Bermondsey Yards’. Aviva Investors and Sellar will redevelop and renovate existing buildings on the site.
Key quote: James Sellar, CEO at Sellar, says, “The site allows for a unique campus-style offering that will embrace the new ways of working that have been forged in the face of the pandemic, and that continue to represent the future of the industry.”
Read the full story: https://www.avivainvestors.com/en-gb/about/company-news/2021/01/london-southbank-landsite-into-prime-office-campus
European CRE investment ‘better than expected’
Summary: Total 2020 investment volumes in Europe reached €275bn in 2020. This is down 17% on 2019, but is better than expected by many industry commentators who forecast falls of 25%-30%. Volumes in Germany reached €79.3bn, down just 5% on 2019, which was a record. The Nordics also had a strong performance, with total investment volumes reaching €43.4bn, up 1% on the prior year. The UK attracted the second largest investment total, with France in third.
Quote: Chris Brett, Managing Director, Capital Markets, EMEA, says, “Covid-19 was a black swan event that has had a significant impact on the real estate investment market.
“The ongoing immunization process is providing the market with some much-needed optimism but the start of the year has been challenging with high infection rates across Europe. Structural drivers will continue to affect the market and as such we expect the strong appetite for Logistics and Multifamily assets to continue. We also expect to see strong demand for core Office properties that provide high-quality amenities for occupiers, particularly around wellbeing and ESG, as well as the ongoing demand from Life Sciences assets.”
Read the full story: https://news.cbre.co.uk/european-investment-volumes-hold-up-better-than-expected-amid-economic-fallout-from-the-pandemic/
UK MP setting up commercial property parliamentary group
Summary: UK MP Gagan Mohindra is launching a new All-Party Parliamentary Group for Regeneration & Development next month to raise the profile of the sector. He is inviting anyone involved in the property industry to get involved in his group and promises regular meetings with government ministers.
Quote: “When we launch next month, we will bring together a new group of parliamentarians who are pro-business and passionate about regeneration. We will connect these parliamentarians with a group of property industry leaders who are willing to think creatively about how we can solve the challenges of our towns. Add into this mix, regular meetings with government ministers and advisors and you have a recipe for a group that will do fresh thinking and will come up with original proposals to make our towns and cities into the vibrant communities that we deserve.”
Read the full story: https://www.theconstructionindex.co.uk/news/view/parliamentary-group-set-up-for-commercial-property-interests
The rise of the ‘shed masters’
Summary: Warehousing used to be the ugly duckling of property, but thanks to COVID, it has become a swan as e-commerce surges, spurring record levels of investor demand for the warehouses that service the e-commerce sector — but can it last?
Quote: The self-styled “shed masters” have long operated on the periphery of MIPIM, the property industry’s annual knees-up in the south of France, but one of the dullest corners of the market is now having its moment in the sun.
Read the full story (paywall): https://www.thetimes.co.uk/edition/business/property-industry-marvels-at-rise-of-the-shed-masters-tvmtmd80v