The end of Europe’s short-lived recession
GRI Club Europe
High-level content and networking, shaping the present and future of the real estate market
GDP fell by 0.1% in the eurozone in both Q3 and Q4 of 2023, and forecasts for Q1 2024 were for a mere 0.1% increase. These expectations were exceeded this week, however, as Eurostat data reported 0.3% growth for Q1, officially ending the eurozone’s short-lived recession.
Inflation remains sticky however, and is creeping up in a number of European countries - not exactly positive for the much anticipated ECB cut in interest rates next month.
Meanwhile, figures for Q1 growth in the UK are due to be released next week, with expectations of a similar level to that of the eurozone. The Bank of England will also review interest rates next week, however hopes are low for any cuts just yet.
GRI Club will be gathering Europe’s most influential real estate market players across the eurozone this month, as annual conferences are due to take place in Germany, Italy, and France.
GRI Report: Spain moves closer to being core RE market
As a general rule, GDP performance and growth of an economy drive real estate investment. Discussions among the Spanish real estate market’s leading voices at España GRI 2024 in Madrid, seem to be proving this rule right.
Sentiment among market players emitted optimism, as Spain’s superior economic performance in comparison to the rest of Europe is attracting increasingly more cross-border capital.
The rise in interest from foreign capital is also attributed to its strong fundamentals, favourable demographics, and fast-growing population. Insights from the Residential for Sale discussion session revealed the new demand emerging in Spain’s residential market.
An influx of affluent foreign nationals into Spain pursuing a higher quality of life is creating a new ecosystem of demand with different expectations to those the Spanish residential market is accustomed to, especially considering their lack of price sensitivity.
Quite the opposite when it comes to the logistics sector however, as discussions revealed the excess of supply for logistics projects is keeping vacancy rates up and rental growth down - something not seen elsewhere in Europe where limited land supply for logistics projects is making opportunities in these countries more attractive.
Future-proofing food retail assets
The e-commerce boom and COVID-19 pandemic have been unforgiving on the retail real estate sector in recent years. Food retail, on the other hand, enjoys inherent resilience due to the inescapable demand for food.
Launched in 2022, GFORM is a market-specialised tenant and commercial real estate manager specialised in food-retail properties across Germany, with currently just over €1.22 billion of assets under management
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“Our ESG framework is an important and binding factor in creating long-term value for not only our investors, but also for society. Our aim is to align the assets we manage with the EU’s climate goals under the European Green Deal,” explains James.
“This entails a deep dive into the catchment areas surrounding our retailers, enabling us to understand the customer journey, retailer’s needs, and ultimately align our interests together with key anchor tenants to future-proof the assets for our investors.”
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