By 2030, the €26 billion Grand Paris project is expected to generate $29 billion of net new money and add 200km to the transport network.
- Paris office submarkets stand to benefit more from the structural changes compared to the CBD
- Saint Denis and Saint Ouen to offer superior returns for a modest risk premium relative to the CBD
Read the Magnify: Grand Paris Project
Latest real estate market outlooks
The accelerating economic recovery in Europe continues and has attracted investment in the region. So, where is the value?
- Broadening economic strength supporting liquidity in real estate markets and rental growth
- Select value opportunities in markets undergoing major structural changes, such as the Grand Paris Project
- Rental growth to be primary driver of returns
The economic upturn is broadening across Europe, while the recovery in economic sentiment continues to filter through to occupier markets.
- The Eurozone outlook for 2018 is one of rude health, with consensus estimates expecting 2.2% growth for the year
- The office sector saw 4% rental growth on average across 23 cities in 2017
- Edge of CBD submarkets offer attractive value for occupiers
- Over 4% rental growth in Nordic industrials markets over next three years
Read the Magnify: European Real Estate Market Outlook
The UK economy has continued to defy gloomy market expectations, providing a supportive macro back drop for the real estate market.
- Progress made on first phase of Brexit negotiations, opening up future UK-EU trade talks
- Central London opportunity in 18-24 months as gradual recovery takes place
- Big ticket deals a key driver of investment, but UK real estate offers a wealth of advantages
Backed by synchronised global growth prospects, continued improvements to business and consumer sentiment are expected in Asia Pacific.
- Singapore office rental growth is likely to be strongest growth over the next 3 years
- Recovery in consumer sentiment and continued growth in regional tourism should lift rents, particularly for Hong Kong
- Preference for logistics and South Korean logistics may see relatively higher total returns
Nordic, CEE and Southern European logistics markets offer better potential for attractive returns, according to M&G Real Estate research.
Here at M&G Real Estate, we forecast rental growth for logistics markets across Europe using our analysis of the physical and digital drivers increasing demand for logistics space. This includes infrastructure development across Europe and we reweight the European Commission’s Digital Economy and Society Index (DESI) to just those factors most relevant to logistics. We analyse the most attractive markets in terms of value and long term rental growth prospects.
Looking further afield for opportunities reveals edge of Central Business Districts as offering attractive fundamentals and value.
The recovery in Europe continues to boost employment and the office market. Tight supply has driven rental growth, supporting capital values. Attractive pricing for investors can be found at edge of Central Business District markets, whilst offering affordability for occupiers.