GVA: The European Property Market Is Recovering

The real estate market in Europe is recovering from the crisis, as the fastest recovering sector is that of residential properties, compared to the office and industrial property sectors. This is what a survey by GVAWorldwide shows.

The trend is also typical for Bulgaria, as the office segment is the only one on the border between standstill and recovery. Most property markets around the world passed their lowest point and at present are on the rise.

Residential property deals are increasing
The residential market shows the fastest recovery compared to that of offices and industrial properties. In London, Milan and Sofia the residential property market started its recovery with an increase in the number of deals and it is gradually gaining momentum. In Vienna and Zurich, where there is fast market growth, demand exceeds supply. Obviously, sellers and investors have managed to find a common language regarding their investment return expectations.

There is market growth in the Scandinavian countries as well, where private investors and pension funds are looking mainly for residential property portfolios. In contrast, Athens and Lisbon are still struggling with the consequences of the crisis. Brussels is the only European city in a phase of a slowed down market growth after a period of stability and slightly increased prices in 2010.

Different pace for the office market
The office segment in Europe is also showing obvious signs of improvement registering an increase in investments and a decrease in the number of unoccupied units. However, there are big differences in the recovery of every separate market. Some cities like Sofia, Vilnius and Vienna are only starting to get over the crisis and are still struggling with the unbalanced market situation in their regions.

Meanwhile, other European capitals have already entered a stage of more stable market conditions and are showing growing optimism. Only Zurich, Warsaw and Copenhagen have made a step towards actual market growth. Office demand is driven both by the interest of national and international companies with different business activities.

Less demand for industrial areas
The situation with the industrial areas in Europe shows the same struggling markets with limited demand. This segment in Vienna, Tallinn, Athens, Lisbon and Milan is at a standstill with almost nonexistent investment interest, while those is Frankfurt, Sofia, Stockholm, Copenhagen, Vilnius, London and Helsinki are slowly recovering, as demand is focused on properties with top locations and stable rent levels.

Warsaw is also registering improvement of market conditions with stable occupancy levels and higher demand. Zurich and Bucharest are already in the market growth phase thanks to local demand of leading industries like the automotive industry, the plastic industry and the recycling industry.

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