EUROPE - Real estate measurement firm IPD, Investment Property Databank, has found “substantial” differences in the yields of investment property in Europe.
“Despite a benign environment of low inflation and low interest rates across Europe, there are still substantial variations in the pricing of investment property,” IPD stated.
IPD studied 12 European markets across the four main sectors: office, retail, industrial and residential. The results are based on IPD data covering 34,000 properties with a combined capital value of €425bn.
“The study should help investors who have long struggled with the lack of consistent data on property yields,” IPD added. It pointed out that yields quoted by brokers and investors to capitalise rental incomes vary from country to country.
“As a result, investors often find it difficult to compare the level of these yields across national boundaries.”
Within each sector, net income yields tended to be lowest in Germany, Ireland and Switzerland and highest in the Netherlands and Norway.
IPD said it has created a new standardised set of net and gross income yield measures in a bid to “cut through all the different national definitions and improve market transparency”.
In July IPD unveiled an 11-country pan-European index for consultation, based on IPD indices for Denmark, Norway, Sweden, France, Germany, Netherlands, Portugal, Spain, Ireland and the UK.