Commercial Real Estate Prices in Europe After COVID-19

Authors: Hoesli, Martin;

Malle, Richard

Source: Journal of European Real Estate Research

Full text

: https://doi.org/10.1108/JERER-09-2023-0031

Abstract

Purpose

The article aims to analyze the behavior of commercial real estate prices in Europe, with a focus on the post-coronavirus disease 2019 (COVID-19) pandemic period. The authors use national and city-level data for the various commercial real estate sectors in ten countries, as well as listed real estate data, to assess any differences across property type and space.

Design/methodology/approach

The authors analyze the behavior of commercial real estate prices after the COVID-19 pandemic, emphasizing differences across property types. For that purpose, the authors use national and city-level direct real estate data for the ten largest countries in terms of market capitalization, as well as listed real estate data. The article then turns to discussing the likely trajectory of commercial real estate prices in the future.

Findings

The recent rise in interest rates and geopolitical instability have affected prices differently across sectors. Industrial properties benefited from the pandemic, although prices declined significantly in 2022. Residential properties continued their upward price trend and have been the best-performing property type during the last two decades. Retail real estate continued its downward price trajectory. Thus far, office markets do not appear to be significantly affected by structural changes in the sector. The data for listed real estate markets in Europe suggest that markets bottomed out in early 2023.

Originality/value

This paper provides for a better understanding of the behavior of commercial real estate prices in Europe since the COVID-19 pandemic. The authors assess whether the effects found during the COVID-19 crisis were temporary or long-lasting. Also, many economic and political uncertainties have emerged since the beginning of the Ukraine war in February 2022, and it is important to analyze the effects of such uncertainties on commercial real estate prices.

Rights

This content is not covered by the Open Government Licence. Please see source record or item for information on rights and permissions.

Cite as

Hoesli, M. & Malle, R. 2023, 'Commercial Real Estate Prices in Europe After COVID-19', Journal of European Real Estate Research, 16(3), pp. 340-358. https://doi.org/10.1108/JERER-09-2023-0031

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Identifiers

DOI: https://doi.org/10.1108/JERER-09-2023-0031

Repository URI: https://hdl.handle.net/2164/22293