17th May 2018

Prime European Investment Opportunities Tighten

• Latest Cushman & Wakefield analysis of 123 European office, retail and logistics markets indicates later stages of property cycle • Semi-Core economies of Ireland, Spain and Portugal offering opportunities • Dublin (logistics) third most underpriced market

Dublin, May 17th 2018 – Twelve markets were downgraded and the same number upgraded as Cushman & Wakefield’s quarterly European Fair Value Index – which analyses 123 European office, retail and logistics markets – reflected an overall trend of fewer attractive prime investment opportunities in Q1 2018.


Using a proprietary metric, each market is benchmarked against ‘fair value’ – an adequate compensation over a five-year hold period for an investor’s risk when purchasing prime assets. In Q1 2018, just 19% of the index was classified as ‘underpriced’. Logistics remains the most attractive sector, with 46% of the markets classified as ‘underpriced’, and only two as ‘fully priced’.


Dublin logistics remains in the top five most underpriced markets in Europe, moving from fifth most underpriced in Q4 2017, to third in Q1 2018. Moscow remains at the top of the table, ranking first and second for its retail and office sectors respectively.


These markets have the highest medium-term rental growth forecasts, and also hold expectations for further yield compression in 2018. At the end of Q1 2018, prime rents for Dublin logistics reached €91 per sq m, an increase of 3.4% in the quarter and 12.3% year on year. Further rental inflation is anticipated for the remainder of the year, with Cushman and Wakefield Research forecasting prime rents of €100 per sq m by year end.


In terms of the office sector, the latest Fair Value index indicates that core office markets including London, Vienna and Istanbul are all classified as fully priced, having reached their lowest historical yield, with limited yield compression forecast and, in many cases, modest rental growth expectations. This is also evident in the Dublin office market with prime yields having returned to 4.00%, a level last attained in 2007. Prime office yields in Dublin are forecast to remain at this level over the course of 2018 and 2019. Dublin offices were classified as fairly priced in the latest index, however sitting at the higher end of this scale, edging towards fully priced. 

Riccardo Pizzuti, Senior Analyst, EMEA Forecasting, Cushman & Wakefield, said: “Our findings reflect the fact that we are in the later stages of the property cycle with many markets being labelled as fully priced. That is not to say value or opportunities are not available, it depends on investors’ strategies, but in general there are fewer opportunities to identify mispriced assets.


After record quarterly investment volumes of €112bn in the fourth quarter of last year, prime product across Europe is becoming increasingly scarce as the economic cycle matures. This resulted in the first three months of this year being the slowest quarter since 2014 with €49bn invested.


“Overall, we expect yields to trend downward for selected markets in 2018, as weight of capital helps sustain competition for quality assets. However, from late 2018 onwards, higher government bond yields will mean that on a relative basis property will look less appealing.”


About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit or follow @CushWake on Twitter.

Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm’s 43,000 employees in more than 60 countries provides deep local and global insights that create significant value for occupiers and investors around the world. In Ireland, the firm has 4 wholly owned offices in Dublin, Limerick, Galway and Cork. Its core services include: agency leasing, asset services, capital markets, facility services, global occupier services, investment management (branded DTZ Investors), project & development services, tenant representation and valuation & advisory. To learn more, visit or follow @CushWake, @CushWakeIRL on Twitter.


About Sherry FitzGerald Group


Since its foundation in August 1982, the Sherry FitzGerald Group has grown from a small fledgling company in one location to a nationwide, diversified business operating in 97 different locations.  Sherry FitzGerald Group currently employs  650 people  across a diversified residential and commercial property business  and remains an Irish privately owned business committed to continuing to lead the marketplace as it has done over the last 32 years.