The View from Berkeley Square – The Property Chronicle
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The View from Berkeley Square The listed European sector shows a strong recovery

Investor's Notebook

Village with fields in the distance

Continental carry trade

The big takeaway from the interim results season is the recovery in continental property markets. It’s been a decade since the listed sector in Europe signalled such a positive outlook in spite of some mixed performances in retail. Offices and logistics/industrial in all countries, and residential in almost all, would appear strong or in recovering phase, and with limited new supply. Combined with low interest rates and strong investment markets, this trend is partly reflected in share price performances, with the EPRA/NAREIT Index for the Eurozone showing an 8% TR in euros YTD, or 15% in sterling.

Colonial in Spain takes the prize as the most positive, particularly on the Barcelona office market, but perhaps the biggest change in sentiment this year is in Paris offices where Gecina, Icade, Unibail and Colonial are signalled good momentum. And it would appear the ‘Macron effect’ has been positive for the regional market with Foncierre des Regions and Icade both reporting improved take-up and rental growth in the larger cities. Meanwhile the Nordic markets continue to show good growth and limited supply, as reported by Entra, Wihlborg and Fabege; and the German office markets outlook remains positive (Alstria). Supply is coming through in Dublin, and Paris has the potential for higher supply, but at the moment Europe is not showing the same supply-side threats as we are seeing in the US (a key feature of the US REIT reporting season). Even the Dutch office market feels better!

Investor's Notebook

About Robert Fowlds

Robert Fowlds

Robert Fowlds retired from investment banking in 2015 as Head of Real Estate Investment Banking for JP Morgan Cazenove. In 10 years Robert led or co-led around 60 public market transactions including IPOs, equity raises and M&A. Prior to corporate finance, Robert was Co-Head of Real Estate Equity Research at Merrill Lynch, and previously Kleinwort Benson, where his team was #1 ranked in the Extel and Institutional Investor Surveys for 11 years. Robert's early career was as a chartered surveyor.

Articles by Robert Fowlds

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