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In Europe the commercial real estate rose in price

Commercial property values across all asset classes in Europe have edged up 1.9% in Q2 2015, with yield shift being the main driver of this, according to CBRE’s latest European Valuation Monitor.

Over the quarter, France and the UK were the best performing countries at the All Property level, rising by 3.0% and 2.4% respectively. Values in Southern Europe also picked up smartly (+1.6%), driven largely by the Industrial sector (+2.4%).

Following several quarters of decline, values in CEE reversed their slide as All Property values rose by 0.8%. The Netherlands also saw values increase at the aggregate level by 0.8%; the office sector saw values decline, but there was a positive turnaround for the Industrial and Retail segments. In CEE, the buoyant Industrial sector contributed to values rising 3.0% in the previous quarter.

Matthew Edmonds, Senior Analyst, EMEA Valuation and Advisory, CBRE commented:

“Once again, yield compression has been the driver of value growth across all asset classes In Europe. The prime end of the market is still the most in demand, but as investors become less risk-averse, they are looking for opportunities in secondary and tertiary markets.

“While a significant weight of money continues to target the real estate sector, we envisage modest growth to continue. As rental growth becomes more prevalent will we start to see more buoyant activity across all sectors in Europe.”

Svetlana Shorina, Director of Valuation Department, СBRE in Russia, said:

“In contrast to European markets Russia is facing business activity decay and property price abatement. Investment into Russian commercial real estate decreased by 30% in H1 2015 on the previous year. At the same time, the main focus of investors is on the less risky office segment.

The market becomes more attractive to the investors with less conservative business strategy due to the fact that commercial real estate market indices are close to the lowest points of the cycle and there is a potential of cost recovery within the next several years.

Though, even for such group of investors, Russian Rouble volatility is a too serious factor to make investment decisions.”