The market environment is one of transition and uncertainty at the moment according to Daniel Mahoney, head of European research and strategy, LaSalle.
He said that there is a contrast between capital markets which are repricing with bid-ask spreads see on the equity side. However, although occupier markets cooled somewhat in the first quarter, they are resilient.
“If you look just a year ago the energy market and crisis we were facing, Europe has really come through that surprisingly – I don’t want to say ‘strong’ because GDP growth is near zero in many major European economies – but ‘resilient’,” he said.
Speaking to Real Asset Media at the recent ULI Europe conference in Madrid, he said that city’s office vacancy rate is currently 5.3%.
“Over the last 20 years its average is 6.3% so office vacancy today is lower than the long-term average,” Mahoney said.
“That really highlights that the occupier market strength is really in contrast to the repricing we’re seeing in capital markets,” he added.
Please click on the video above to watch the full interview or listen to the podcast below.