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POSITIVE OUTLOOK FOR VOLUMES DESPITE WEAKER PERCEPTIONS
When it seemed that the Eurozone economy was finally starting to pick up momentum, weaker than expected economic data, particularly in Germany, France and Italy, and the threat of deflation, have cast doubt over the sustainability of the recovery.
Europe, Middle East and Africa
45% of Western European investors see room for further yield compression, the largest share globally when compared with other investors Richard Divall, Head of Cross Border Capital Markets || EMEA
2015 GLOBAL INVESTMENT SENTIMENT REPORT
In its September forecast, the European Central Bank (ECB) still expected the Euro area to grow by 0.9%, but in light of the recent economic deterioration, further downward revisions in growth forecasts appear possible.
This might explain why fewer investors (32%) compared to last year (44%) expect property conditions to improve further in the next 12 months in Western Europe (ex. UK).
Nonetheless, despite the economic headwinds, a majority of global investors expect investment volumes in Western Europe to continue to grow this year (59%) and next year (56%). RCA estimates suggest that investment in Europe in the first nine months of the year is approximately 10% higher than last year. Colliers’ understanding of deals underway suggests a strong finish to the year.
Perceptions about investment conditions in CEE are less positive, probably due to recent developments in Ukraine: a majority (52%) expect property investment conditions to deteriorate (32% last year) and around 40% expect volumes to fall in 2014 and 2015. While Colliers’ analysis shows that investment volumes for H1 2014 are down year-on-year, the impact is localised to Russia and Ukraine. Across the remainder of the CEE territory markets have witnessed an increase in ‘active investor’ interest. This has translated into high investment volumes in Poland and the Czech Republic – both markets are set to at least match 2013 volumes. Tier two markets such as Hungary, Romania and Serbia are also set to outperform 2013 investment levels. Colliers’ prognosis is for an even better year in 2015.
Global investors are divided about Middle East and North Africa (MENA), but overall are more optimistic than last year: 29% expect property conditions to improve there, compared with 20% a year ago.
COLLIERS INTERNATIONAL
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