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After the stumble, the rebound. The repricing hit the asset class hard, especially in Germany and Anglo-Scandinavian regions, as well as in the United States, where the office is once again at the center of interest for European investors.
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According to the latest analysis by CBRE, office buildings became the most active sector in Europe in the first half of the year, with investment increasing by 1% to 18.7 billion euros.
«The repricing phase of offices is over Main Rob Wilkinson, CEO of Aew Europe, said: “We will relaunch this asset and make it attractive again. I see two types of investors who are likely to be active buyers: generalists, long-term investors looking for trophy assets at a discount, and those who opportunistically look for high-yielding and distressed assets to meet the needs of modern tenants by renovating them or converting them into residential or residential properties. Mixed UseCapital values for the office asset class as a whole in Europe fell by 26%, while capital values for all other sectors combined fell by 16%. mood In the sector, the figures are still low, but they are overstated, as many investors have suffered heavy losses. Our forecast is that offices will have the highest total returns. “If buying now, if investing in new resources today, then people should really consider offices, also for the rebound effect: the more valuations fall, the bigger the recovery will be.” Here it comes again. «Debt remains an issue that must be addressed. Wilkinson added that in many cases the collapse in real estate valuations has left banks with debts greater than the value of the assets themselves, but there are negotiations between debtors and lenders. Banks are well capitalized, especially in southern Europe: Italy, Spain and Portugal have solid fundamentals. We are still far from where we were in the last financial crisis. I don’t see a financial shock, a large-scale portfolio sale, but the recovery of values and the absorption of real estate debt will take a relatively long time. “
“The coronavirus pandemic has accelerated the appreciation of the value of logistics, residential and office buildings, especially due to low interest rates – explains Rashid Hassan. Director- Head of Global Cross-Border Investment But it has also accelerated a rethinking of the office, no longer just in terms of the occupation of space but also in terms of services, and has accelerated a selection process of differentiation between offices that had already begun under the radar. Main – efficient, technical, well located, well serviced and easily accessible – secondary offices – peripheral, less functional and inefficient from an energy point of view. The former have declined slightly and in many cases not at all. The latter have halved their value. The European average vacancy rate is 8%, with vacancy rates in peripheral offices exceeding double digits, but office vacancy rates are MainIn Milan, for example, it is no more than 3%. “In fact, the problem is precisely that, because there is so little construction at the moment, the industry could face a chronic shortage of products in the coming years. “2023 – says James Burke, Director of Global Cross-Border Investment and European Capital Markets Savills – New office deliveries fell 23% year-on-year to 3.3m sqm, the lowest level in five years. In 2024, we expect growth of 30% to 4.3m sqm. Over the next five years. The rising construction and financing costs of new developments across Europe in recent years will lead to a shortage of Grade A space by 2027/2028. All else being equal, developers are likely to demand higher office rents. Main A figure of around 10% is needed so that new projects are sustainable.” Offices return by the end of 2023 Mainin European capitals, it should be between 4% and 5.25%.
“There is a growing gap in demand and financial performance between highly sustainable, prime office buildings and secondary and obsolete ones – says Marie-Laure Leclercq De Sousa. Head of Leasing Market Consulting Jll – is both the biggest opportunity and the biggest problem for investors. In the next decade we will see the biggest shift of square meters from offices to other uses. The greater the burden and bureaucracy, the more difficult it will be to attract investment and convert these buildings to new uses. In Paris, for example, in the city center we have 5 million square meters of space that is no longer rented. Who will pay for their conversion? At the same time, by 2030, new office projects will be launched in major European cities Main They can only meet 46% of new office demand. In the fourth quarter of 2023, 1 million square meters of new office space were delivered in Europe: the largest share was in Paris, London and Milan. The fundamentals are sound. We must also consider spaces that complement “traditional” offices: labs Life Sciencesdata center”.
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