Abstract
Purpose
The article analyzes the behavior of commercial real estate prices in Europe with a focus on the post COVID-19 pandemic period. We use national and city-level data for the various commercial real estate sectors in 10 countries, as well as listed real estate data, to assess any differences across property type and space.
Design/Methodology/Approach
We analyze the behavior of commercial real estate prices after the COVID-19 pandemic, emphasizing differences across property types. For that purpose, we use national and citylevel direct real estate data for the 10 largest countries in terms of market capitalization, as well as listed real estate data. The article then turns to discussing the likely trajectory of commercial real estate prices in the future.
Findings
The recent rise in interest rates and geopolitical instability have affected prices differently across sectors. Industrial properties benefited from the pandemic although prices declined significantly in 2022. Residential properties continued their upward price trend and have been the best-performing property type during the last two decades. Retail real estate continued its downward price trajectory. Thus far, office markets do not appear to be significantly affected by structural changes in the sector. Data for listed real estate markets in Europe suggest that markets bottomed out in early 2023.
Originality/Value
This paper provides for a better understanding of the behavior of commercial real estate prices in Europe since the COVID-19 pandemic. We assess whether the effects found during the COVID-19 crisis were temporary or long-lasting. Also, many economic and political uncertainties have emerged since the beginning of the Ukraine war in February 2022, and it is important to analyze the effects of such uncertainties on commercial real estate prices.
The article analyzes the behavior of commercial real estate prices in Europe with a focus on the post COVID-19 pandemic period. We use national and city-level data for the various commercial real estate sectors in 10 countries, as well as listed real estate data, to assess any differences across property type and space.
Design/Methodology/Approach
We analyze the behavior of commercial real estate prices after the COVID-19 pandemic, emphasizing differences across property types. For that purpose, we use national and citylevel direct real estate data for the 10 largest countries in terms of market capitalization, as well as listed real estate data. The article then turns to discussing the likely trajectory of commercial real estate prices in the future.
Findings
The recent rise in interest rates and geopolitical instability have affected prices differently across sectors. Industrial properties benefited from the pandemic although prices declined significantly in 2022. Residential properties continued their upward price trend and have been the best-performing property type during the last two decades. Retail real estate continued its downward price trajectory. Thus far, office markets do not appear to be significantly affected by structural changes in the sector. Data for listed real estate markets in Europe suggest that markets bottomed out in early 2023.
Originality/Value
This paper provides for a better understanding of the behavior of commercial real estate prices in Europe since the COVID-19 pandemic. We assess whether the effects found during the COVID-19 crisis were temporary or long-lasting. Also, many economic and political uncertainties have emerged since the beginning of the Ukraine war in February 2022, and it is important to analyze the effects of such uncertainties on commercial real estate prices.
| Original language | English |
|---|---|
| Pages (from-to) | 340 - 358 |
| Number of pages | 19 |
| Journal | Journal of European Real Estate Research |
| Volume | 16 |
| Issue number | 3 |
| Early online date | 17 Nov 2023 |
| DOIs | |
| Publication status | Published - 24 Nov 2023 |
Keywords
- Commercial real estate prices
- Europe
- COVID-19
- Industrial
- Residential