Office properties were Europe’s best performing commercial real estate sector in the fourth quarter of 2012, according to CBRE’s latest European Valuation Monitor, which measures capital value movements.
Office properties were Europe’s best performing commercial real estate sector in the fourth quarter of 2012, according to CBRE’s latest European Valuation Monitor, which measures capital value movements.
Office properties recorded a fall of just -0.5% in capital value in Q4, with positive performance in France, UK and the Nordics. At a country level Norway, Sweden and Finland recorded the strongest quarterly performance. This is in comparison to industrial at -1.0% and retail at -1.1%. Over the year, office and retail saw similar declines of 2.5% and 2.4%, respectively.
In the final quarter of 2012, European capital values remained broadly stable, registering only a marginal decline of 0.8%. However, this does bring CBRE’s pan-European index to its lowest point since Q3 2009.
'Capital value changes in our European Valuation Monitor have been driven by yield changes over most of the past year, rather than market trends,' said Simon Threlfall, associate director of EMEA Valuation at CBRE.
CBRE's latest data shows that the All Property Prime Yield across Europe fell slightly in Q4, dropping 3 basis points to 5.75%. This continues a period of stability in prime yields across the region that has seen little overall change in the last 18 months.
According to CBRE, the European market will see some change in the current polarisation of yields over the next 12 months as investors broaden their investment criteria to also include good secondary assets.
