The European commercial real estate market will start to bounce back in 2024, predicts Cushman & Wakefield in its EMEA Outlook 2024.
The company anticipates growth rates of 0.9% for the Euro area and 0.3% for the UK in 2024, with prime rental growth projected at 3.4% for logistics, 2.1% for offices and 1.2% for retail across Europe for 2024. Cushman & Wakefield expects prime property yields to peak in H1 2024.
Sukhdeep Dillon, head of EMEA forecasting at Cushman & Wakefield, said: “As we look ahead to 2024, our forecasts indicate commercial real estate markets are approaching an inflection point after a turbulent period. Though economic growth remains subdued for now, the tide seems poised to turn.
“While risks like persistent inflation remain, baseline forecasts point to measured expansion rather than recession in Europe. The diminished level of transactions in numerous markets has led to a slower phase of price determination, particularly for the office sector. But we are beginning to witness swifter price adjustments taking place in the more liquid markets, such as in the UK and the Netherlands. As rate hikes end and cuts commence around Q3 2024, we expect to see a bottoming out for valuations.
“Whilst 2023 still presented challenges, 2024 is shaping up as the early stages of recovery. Investors with a medium-term outlook should feel increasingly confident deploying capital as the market stabilises. The challenges of the past 18 months will give way to renewed optimism by this time next year. Nevertheless, it is paramount to have a thorough understanding of the sector to capitalise on opportunities for both occupiers and investors.”
