Europe’s listed property sector regains ground

The value of Europe’s listed commercial property market rose in the third quarter, defying expectations that ongoing delays around Brexit would see further falls. At the end of September, the total value of listed real estate in developed Europe was US$499bn (£388.7bn), up 3% from $486bn in the second quarter, according to the latest figures from the European Public Real Estate Association. The Q2 figures had represented a quarter-on-quarter drop of 1.2%. The value of the UK listed commercial property market rose 2% in the third quarter to $89.5bn, after a 5% fall in Q2. The UK remains the second-largest developed European market, behind Germany, where values rose 2% from $104.9bn to $107.1bn. Dilek Pekdemir, EPRA’s research manager, said the industry had maintained a “business-as-usual” approach in spite of persistent Brexit uncertainty. “Despite the announcement of the German residential rent controls law and ongoing uncertainty around Brexit, the slump in the German and UK listed real estate market did not persist into Q3,” Pekdemir said. “Following political difficulties and continued Brexit discussions in the UK, one may have expected the value of listed property in the UK to continue to fall, as it did in Q2. But, in lieu of any decision on Brexit, the industry has been maintaining a business-as-usual approach, and this has paid off with short-term growth in the market.” Pekdemir noted that Germany’s total listed real estate value was still 5% lower than in the first quarter, “which may be attractive for investors seeking a bargain”. She also highlighted Sweden, which has leapfrogged France to become the third-largest real estate market in Q3 at $67.7bn. “Swedish companies have performed well since the beginning of the year, especially in the industrial, logistics and residential sectors, and investors seem drawn to this,” Pekdemir said. EPRA’s report shows that the total value of commercial real estate in developed Europe is estimated at around $8.2tn, of which listed real estate makes up $499bn. In total, there are some 202 real estate investment trusts within the listed real estate sector in the developed European markets, with a combined market capitalisation of more than $213bn. To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette