RREEF Research

European Property Cycle Monitor

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GDP growth forecasts for Europe revised downwards to 1.9percent and 1.3 percent for 2011 and 2012 respectively are expected to climb to 2.4 percent per annum by 2015. Recent events dictate that the risks to this are predominatly on thedownside and specifically in the near term.

A number of global uncertainties make it difficult to assess Europe’s overall short-term prospects. While Ireland and Spain seem to remain on track with policy measures to address their budget problems, the fiscal trajectories of Greece and Italy appear less certain. The ramifications of a Greek default perpetuate fears about the overall health of the European banking industry.

Investment transaction volumes in the third quarter of 2011 indicate a significant slowdown in investment levels in response to the renewed concerns over Eurozone debt issues and near term growth prospects. As a result the well documented flight to safety that has driven down yields in prime markets has widened the differential between prime, mature, liquid markets and secondary more peripheral markets. As the wider economic environment remains uncertain thisrelativity is likely to widen further as prime continues to be perceived as a safe haven for capital preservation.

Source : RREEF

Mots-clés : RREEF