European Markets Offering 'Less Attractive' Returns

The latest European Fair Value Index (FVI), published by DTZ, has suggested that property markets in the region now offer less attractive returns for investors than they did in the third quarter of 2010....

The latest European Fair Value Index (FVI), published by DTZ, has suggested that property markets in the region now offer less attractive returns for investors than they did in the third quarter of 2010.

Representing activity in the markets for the fourth quarter of last year, the FVI recorded a score of 40, down from the 55 previously seen in the quarter before.

In Europe DTZ said that the number of markets classed as HOT has fallen to 14 in Q4, down from 23 in Q3, while the number of markets described as COLD and not offering good growth opportunities has increased to 34 from 14.

However, despite the news, a number of emerging European markets such as Prague and Moscow were found to now present investors with attractive buying opportunities as following aggressive price correction.

Tony McGough, global head of forecasting and strategy research at DTZ, said: "Our overall view on the market did not change considerably, however many core European markets are now at Fair Value and much rental growth has already materialised. Investors will be more reliant on income returns than yield-driven capital growth recovery in the core and will have to expand their horizons to find greater capital value growth."

- Thursday 24 February 2011

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