UK and Germany drag down Europe’s listed real estate market

The value of Europe’s listed real estate (LRE) market was down 1.3% to $485.6bn (€436.7bn) in the second quarter of 2019 from the previous quarter, according to a report.

The European Public Real Estate Association’s (EPRA) latest quarterly Total Markets Table, showed that as at the end of June, the market had lost $6.3bn due to negative returns in the UK and Germany.

The research, which evaluates the total market capitalisation of listed real estate across all European markets, saw more than $4bn (-4.5%) wiped off the value of listed property in the UK, while Germany’s fell by exactly $8bn (-7.1%).

Germany now accounts for $104.9bn of the European LRE market and still remains the largest in the region. The UK is second and France is third as they contribute $87.5bn and $63.2bn respectively.

Ali Zaidi, director of research and indexes, EPRA, said Germany’s residential market took a major hit in value terms in Q2, mainly due to the discussions around rent control laws.

This wiped more than seven percent off the value of Germany’s wider listed property sector in this period, he said.

“Earlier in the year, the UK’s commercial property market looked as if it could rally in the short term.

“However, renewed uncertainty, particularly in race for the premiership in Q2, has seen the value of property shares fall and caused additional pressure that will likely cause the market’s significant discount to persist,” Zaidi said.

Zaidi said Europe’s listed sector has fallen in the last quarter, but the overall picture for Europe is actually one of marginal growth.

“The UK and Germany are the two most influential markets in value terms, and both are experiencing specific political conditions that have negatively impacted investor sentiment, disproportionately affecting the value of the wider European market.”

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