European property investors buying more adventurously | 23 September 2013
European property investors are becoming more adventurous with their choice of purchases.
A number of property advisory firms have confirmed they have noticed investors becoming increasingly tempted by investments in secondary cities and less traditional assets.
According to efinancialnews.com, these bold investments tend to pay off, bringing larger yields than similar properties in nearby areas.
For example, Jones Lang LaSalle reports that prime office space in London is currently delivering yields of four per cent, whilst office buildings in smaller cities offers yields of up to 6.25 per cent in the current market. Similarly, yields for prime office space in Lyon are averaging around 5.65 per cent, compared with 4.5 per cent in the more crowded Paris market.
Investors have widened their scope to include car showrooms, healthcare properties and budget hotels, ahead of more traditional properties too, it was claimed.
Cushman & Wakefield has cited this broadening of sales criteria as one of the major reasons why the European commercial property market is so strong.
However, Deutsche Asset and Wealth Management believes that the opportunity to take advantage of the higher yields offered from these properties is limited.
According to wsj.com, the company recently warned its clients that “the window for taking advantage of secondary location in North-Western Europe will not remain open indefinitely”.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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