A research produced by
European real estate has provided investors with exceptionally high levels of return over the past few years. However, we are now seeing signs that the market as a whole is starting to moderate. While yields may not yet have reached a trough, and further rental growth is certainly likely, countries such as Germany look to be entering the more mature stages of this cycle.
The economic outlook remains one of expansion and falling unemployment. Office and retail space will benefit from further job growth, while logistics will likely gain from improving terms of trade. In time, the unwinding of monetary loosening will likely prevent the very high returns of recent years, but this process will almost certainly be extremely gradual, and with sustained occupier demand and diverging business cycles, should provide opportunities to achieve outperformance through stock and market selection.
Source : Deutsche Asset & Wealth Management
