Cushman: Industrial RE under-priced in Europe

A report from the global real estate service provider said that 70 percent of the sector is under-priced in the region.

Industrial commercial property assets across Europe are offering investors the best return for their money, according to a new report from Cushman & Wakefield. The global real estate service provider's annual fair value index revealed that 70 percent of the sector is under-priced.

“Ongoing changes in retail distribution and the impact of the Internet continue to bring about change in the logistics sector. However, the higher yields available compared to retail and offices are making for good investment opportunities,” commented  Matteo Vaglio Gralin, associate director at Cushman & Wakefield.

In terms of geography, the report showed that 47 markets were classified as under-priced in the third-quarter analysis. The analysis said Central and Eastern Europe, the Eurozone periphery and the Benelux regions have the highest share of under-priced markets and boast the most attractive opportunities for investors.

However, Fergus Hicks, associate director at Cushman & Wakefield said: “The European property market continues to offer attractive investment opportunities. However, we expect opportunities to diminish further as yields continue to edge lower and cause the number of 'fully priced' markets to increase.”

The European Fair Value Index said that in the short term, attractive investment opportunities will diminish as strong investor demand continues to push property yields lower. In most core Eurozone markets, yields are not predicted to start to increase until 2018.