Anyone reading this publication will already be aware of the strong capital value growth experienced across European real estate in recent years. That growth has been more pronounced in some markets and sectors than others, so now is an opportune time to review how much value remains on offer, where best to find it and what strategies to deploy in accessing it.
There seems little doubt that real estate continues to offer value relative to other asset classes, particularly fixed income. The spread between bonds and property remains comfortably above long term averages.
However, yields in some markets and sectors are now at historic lows, which – despite the evident relative value of the asset class as a whole – has prompted questions about how advanced we are in the current cycle and indeed whether pricing is sustainable. Prime central London offices are a particular subject of debate, with continued global appetite driving yields lower and lower.
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