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Briefing note

Southern Europe: The PIGS are biting back

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Southern Europe: The PIGS are biting back

Different stages of the recovery are leading to different opportunities.

The investment volume in Southern Europe totalled nearly €13.1bn in Q1 Q3 2017 and is forecast to surpass €19bn by year end.

Cross border investors have been more active than domestic buyers accounting for 70% of the investment volume compared to the EU average where cross border investors typically account for 52% of the total.

The high street retail sector will be one of the biggest benefiters from the rise in consumer spending and tourism.

The office vacancy rates are falling due to increasing demand and lack of
good quality space in the CBD. This has been putting upwards pressure on rents in Madrid, Milan and Lisbon.

The average Southern European prime office yield hardened by 45bps annually (4.65%) by Q3 2017 and has room to compress further, particularly in Portugal and Greece.

The growth of ecommerce will lead to increasing demand for logistics and warehouse space which has been lagging in Southern Europe. 

Source : Savills

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