SIOR: similar trends visible across European markets

The pandemic has had a similar impact across Europe. Volumes and percentages vary, but the same trends can be observed at work in different countries, experts from the Society of Industrial and Office Realtors (SIOR) told Real Asset Insight.

Growth in the logistics sector and the rise of e-commerce is one such visible, cross-border trend.

“We advised on 120 deals in the last financial year, which is significantly higher than normal”, said Fabian Mühlen, partner, co-head real estate Germany, DLA Piper.

“Half of those deals were in logistics, across all different segments from big box to small warehouses to last mile assets. It has been a good year for real estate investments in Germany and prospects are positive for 2022.”

In Poland as well the logistics sector has been one of the great drivers in the market.

“E-commerce has been a real trigger for development along with nearshoring,” said Renata Osiecka, managing partner, AXI Immo Group.

“Amazon has led the way and now we have Chinese companies coming as occupiers. The lettings market is booming and the logistics sector is very dynamic.”

There is a lot of liquidity in the market and demand is high, but across Europe the problem is lack of product.

“Logistics is the new office sector, that every investor is interested in,” said Tobias Schultheiß, managing partner, Blackbird Real Estate.

“A lot of German investors were happy with the travel ban because they had less competition in the market, but now international capital has come back, there are many offers for each asset that comes to the market and prices are increasing.”

The change in the office sector is another trend that has crossed borders, as companies and employees adapted to the new restrictions.

It proved that necessity is the mother of all inventions, said Paul Danks, president of the European regional chapter, SIOR DRG Group: “In the London market demand for offices has held up and there’s a lot of activity but what’s been interesting is that new ideas have come forward on layout and design as well as use of the space. I think the pace of innovation will become even faster in future.”

Working is set to remain flexible, but the expectation is that more people will gradually return to a changed, more employee-friendly office.

“Our forecast is for offices to go back to full occupancy in Ireland in January,” said Brian Gaffney, director, Murphy Mulhall & Partners. “But creativity is key in unlocking opportunities when there is so little stock available in the market. It’s a chance to look at older properties and redevelop, convert and reposition them.”

Given that the European real estate market is dynamic and liquid and that domestic and international investors are actively looking for opportunities, prospects for 2022 are positive, experts agreed.

The market has also become more varied and more interesting, said Alberto Iori, director, Guizzo: “In the past the choice was between offices and retail, but now the number of options for real estate investors is so huge, ranging from resi to logistics to alternatives to hotels to parking. That’s why sentiment is so positive.”