Cushman & Wakefield is forecasting a slow recovery in European property markets this year on the back of positive GDP growth in most economies. 'Momentum may slow in the second half of the year as the cyclical impact of restocking fades, but, for now at least, a double-dip recession looks a less likely scenario than just a slowing in growth,' according to research director David Hutchings in the adviser's latest economic outlook for the EMEA region.

Hutchings claims a mix of still relatively attractive pricing, improving confidence, low interest rates and a search for productivity gains or new market share, should lead to a range of opportunities for focussed and well-funded businesses. 'This suggests potential for increased activity in investment and occupational real estate markets as the year progresses.'

While the recovery will be slow and uneven, Hutchings claims it will be sustained. 'Many of the worries currently pre-occupying the market - be it rising inflation and interest rates, an ending of fiscal stimuli or approaching asset price bubbles - may be best put aside for a later date.'

Hutchings does not believe 2010 will be a year of high inflation. 'Arguments for low, or even negative inflation are still the more compelling at present. On the supply side, the recent downturn has opened up a significant output gap in most economies. Consequently, there is little danger of a consumption driven rise in prices in the short term. Furthermore, such has been the extent of the downturn, many firms can still increase output from current levels merely by reinstating idle resources at little cost.'