A number of major milestones were reached this week in PropertyEU’s home market, as well as further afield.
On Thursday the European Public Real Estate Association (EPRA) announced that its key benchmark for Europe's listed real estate companies reached 100 constituents and has now passed the €200 bn market capitalisation level. According to EPRA's CEO Philip Charls, the market is growing fast as global investors increasingly seek solid income investments as an alternative to record low yields in fixed income.
'Listed real estate provides this alternative with the added advantages of liquidity and a performance that mirrors that of the underlying property assets in the long term,' he said.
The twin trends of consolidation and specialisation continue apace in the listed real estate sector, both in Europe and globally. In France Gecina and Eurosic are still vying for control of office REIT Foncière de Paris while in the US, international hotel group Hilton detailed plans this week for the spin-off of its real estate assets.
The new real estate investment trust (REIT), to be called Park Hotels & Resorts, will own most of Hilton's properties and will be the second-largest publicly traded REIT in the lodgings industry. The portfolio will consist of 69 premium-branded hotels and resorts with nearly 36,000 rooms located in the US and internationally and the company is expected to generate earnings before interest, taxes, depreciation and amortisation (EBITDA) of $825 mln (€728 mln) in 2016, Hilton said in a statement.
Good news from the office sector
For several years since the onset of the global financial crisis, there was little good news to report in terms of real estate market fundamentals in Europe. The horizon is now steadily brightening. A report issued by CBRE this week suggests that the worst may be over in the European office market. Office take-up in Europe in Q1 2016 reached its highest first quarter level since 2008 at 3 million m2 while the vacancy rate has dropped to the lowest level since mid-2010.
For the EU-28, the figure now stands at 10.35%, driven by increased demand at a time that development levels are still subdued, CBRE said. Rents remained stable in the majority of markets, but prime rent rises have been registered in a handful of cities.
The development engine is already sparking back to life again in some corners of the Continent and in our home market Amsterdam we learned this week that Dutch developer Provast is to redevelop the Twin Towers in the heart of the Zuidas business district on behalf of Commerz Real’s open-ended real estate fund hausInvest. In fact, the PropertyEU team can report that a record number of developments including residential and student housing were announced at the Provada real estate fair in Amsterdam this week.
PropertyEU itself also beat a record with the number of briefings we hosted at the International Business Lounge at Provada together with our partners ULI Europe, RICS and ICSC. The topics ranged from innovation and urban investment to the future of logistics, alternative sectors and retail and we have already published a number of news stories from the panel discussions. The editorial team is still processing the different pieces of the puzzle which will come together in our Outlook edition in July.
Transparency and the importance of data for investors
Another highlight at Provada for the media and research company behind PropertyEU and its sister publication PropertyNL was the launch of Ventu. This new database for the Dutch real estate market is a one-stop shop for real-time data on the supply of all types of commercial real estate in the Netherlands brought together from over 2,000 real estate advisors across the country. The database, which goes live on 1 July, also provides details about transactions and analysis about specific buildings and locations.
Ventu marks a major milestone for PropertyEU and PropertyNL in this year of our respective anniversaries (10th and 15th). And we are proud to report a warm reception so far. The market can only embrace this type of initiative, Maarten Vermeulen, regional managing director for RICS Europe, Russia and CIS, said during a panel discussion hosted by our publisher Richard Betts on transparency and the importance of data for investors.
'Of course, it all depends on the quality of the data and whether it meets ethical standards, but initiatives like this are great for improving the transparency of the market,' he said.
Hein Brand, former CEO of ING Real Estate Finance and member of the Ventu advisory board, went a step further and called Ventu a 'unique' system worldwide. 'Ventu gives international investors in the Netherlands a massive advantage. It’s a unique proposition, I hope we can roll out this system throughout the rest of Europe.'
That would clearly be another major milestone for PropertyEU. I can disclose that it is on our agenda.
Judi Seebus
Editor-in-chief PropertyEU
