The industrial property sector currently offers the best value in Europe, followed by retail and offices, according to DTZ’s latest Fair Value report.
The DTZ Fair Value Index for the fourth quarter of 2012 stood at 86, up from 69 in Q3, followed by retail at 82 (71) and offices at 70 (51).
Overall, European commercial property is at its best value in 10 years, with the index score rising to 78 in Q4 2012 from 62 in Q3.
The rise in the index was driven by more positive sentiment on the eurozone, which pushed bond yields and required returns down. This has resulted in property looking better value in comparison to bonds.
The European all-property index score has risen every quarter since Q3 2011, when concerns about Spain and Italy escalated and bond yields rose across Europe. The steady increase in the index means that it is now at its highest level since 2003.
Of the 105 property markets covered, 69 were rated as hot and 25 warm, making them attractive from an investment perspective. The UK and Germany in particular offer good investment prospects, with by far the majority of markets in both countries being rated as hot. There are 11 cold markets in Europe, located mostly in Spain, France and Turkey.
Between the third and fourth quarters, 33 markets were upgraded, with 24 going from warm to hot, and 9 going from cold to warm. Fears over Italy and Spain have receded somewhat, says DTZ, and this is reflected in their Fair Value Index scores. However, at best property markets in these countries look to be fairly priced, with all markets in Italy rated warm, but the majority in Spain remaining cold.
Click on the pdf to read about PropertyEU's recent Investment Briefing on the European logistics sector.
European Logistics @MIPIM
PropertyEU, in partnership with IPD, is holding an update on the logistics sector during MIPIM. THE event takes place on 12 March between 1pm and 2.30pm at the IPD Auditorium E, Level 3.
The panel includes Emmanuel Van der Stichele, fund director at Goodman European Logistics Fund, Peter Hobbs, senior director of business development at IPD and Stefan Wundrak, director of research property at Henderson Global Investors.
Click on the links below for more details of the PropertyEU's European Logistics Briefing and MIPIM logistics programme.