There is a long road ahead to full recovery, but Europe is now out of recession according to Knight Frank which today hosted its annual European Breakfast at Claridges.
Highlights included:
• Foreign capital was behind over 90% of transactions in excess of £100 million in London
• This year has seen the anticipated proliferation of activity from the Super High Net Worth Individuals (SHNWI’s), coming from all corners of the globe and targeting key European hubs
• Key cities to focus on for investors in the coming year include key hubs in UK, Germany and France but also extend to other major capitals such as Amsterdam, Brussels, Madrid and Milan
• Short term indicators such as business confidence and PMI surveys looking up – businesses and consumers are now more confident, this is already feeding through to the investment market, which has seen a pick-up in activity, especially in Spain and Italy.
• Sectors which will support future economic growth will include infrastructure and technology, and, while there are many issues to overcome, Shale gas is potentially another area of significant growth.
• Improving business confidence is expected to result in a pick-up in occupier activity, as businesses become more willing to take decisions about future strategy and property needs.
• Despite many gloomy forecasts, the Euro area has held together and is now more stable. Indeed Latvia is set to join the single currency in January next year.
Chris Bell, Managing Director of Europe, commented: “Whilst there is still work to do, the risk of ‘catching the falling knife’ has dissipated and we anticipate the start of a long recovery in Europe over the next 12 months.”
Andrew Sim, head of European Investment, Knight Frank, commented: “Many investors remain focused on Tier 1 Capital cities, but we detect an increasing willingness to move up the risk curve, whether this is in terms of locatio or, indeed, a degree of letting risk.”
Darren Yates, head of European research, Knight Frank commented: “While there is still a long road ahead, Europe’s economy seems to be finally turning the corner and this bodes well for the property market. We are therefore more optimistic than we have been for some time about the outlook for the next 12 months.”
Phillipe Perello, head of Knight Frank France commented: “Many occupiers have sat back for a number of years and have delayed decision making because of the economic uncertainty. However, the recent more positive economic news shoud give a boost to market activity, as businesses become more willing to take decisions about future corporate strategy and their real estate needs.”