Europe

EUROPEAN MARKETS April 2011

Q1 2011: THE POSITIVE TREND CONTINUES

Despite slow improvement in occupier demand, activity in the commercial real estate investment during Q1 2011 continued the upturn observed in 2010. We expect only a slight increase in take-up levels during 2011 whilst prime rents should be stable. Markets with solid economic fundamentals will remain top of the heap; moreover, more investors may turn towards riskier assets or markets in order to improve returns in a context of rising interest rates.

After growing by 1.7% in 2010, Euro area GDP is expected to record a similar performance in 2011. The first quarter of the year confirmed the ongoing trend with economic growth continuing to be driven by the German economy. On the other hand, inflation continues to increase on the back of higher food and energy prices, therefore the ECB has raised its monetary policy rate for the first time since mid-2008. In the labour market, the first drop in Euro area unemployment rate was recorded since the recession began.

Author(s): several

Source: BNP Paribas Real Estate

Published: 18.04.2011