The past few years have been good for property markets across Europe. Commercial property in particular has performed strongly in many EU member states, with prices rising quickly and demand for good quality premises on the up. Though price rises are beginning to level off a little, experts are still predicting strong growth in the commercial property sector in 2017.
Attractive exchange rates are tempting investors in from outside the Eurozone, while improving business prospects within the Eurozone are helping to drive investment and increase demand for commercial property. This adds up to a positive outlook for Europe’s commercial property market and potentially lucrative returns for investors.
Investment from outside the Eurozone
According to investment firm Fidelity International, the European Central Bank’s quantitative easing programme has encouraged investment in the core Eurozone. Much of this investment is being made in commercial property across central Europe, with Germany in particular benefitting from investment.
The relatively low values of the Euro and the Pound are attracting investors from the Middle East, Asia and North America. However companies and individuals from within Europe itself are also showing confidence in the continent’s commercial property market.
While quantitative easing is in place, and as long as there are no seismic political or financial upsets within Europe in the coming year, experts are expecting investors to see yields of around 3%. In some circumstances, yields of up to 4.5% will also be possible. However, as the growth cycle is predicted to slow a little, investors need to carefully research each opportunity they’re offered to ensure they avoid risk as much as possible.
Rental income over capital growth
As the rate property prices are increasing at is expected to slow, investors would be well advised to put extra consideration into the type and quality of tenant they hope to attract. High quality cash flow will be one of the best and most reliable income sources for businesses and individuals investing in commercial property in the UK and across Europe.
With growth in Europe’s commercial property market predicted to continue its upward trend, the continent remains an attractive destination for investors from all over the world. With the outlook for 2017 broadly positive, the coming year is set to bring more good news for those investing in the European commercial property market.
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