Dils European Market Report 2023

The European Market Report 2023 has been published, the study by Dils dedicated to analyzing the market in major European countries and cities.

The Report highlights an encouraging performance in most of the 15 markets analyzed in Q4 2023: double-digit growth in investments compared to the previous quarter indicates a significant slowdown in the contraction of volumes, which almost halved in 2023 compared to 2022.

The main reason for this decline lies in the challenging alignment between supply and demand. The persistent repricing trend observed throughout the year resulted in several upward revisions of prime yields across major markets, continuing into Q4. Nevertheless, with forecasts of cut in interest rates in H2 2024, financial markets can now anticipate increased stability. This could pave the way for a recovery in activity throughout 2024, giving continuity to the positive Q4 trend.

The country showing a higher recovery is the UK, whose gap over 2022 was limited to -18%, with a Q4 investment volume almost double than its 2022 homologue. On the other hand, countries showing the highest contraction in investment activity are Belgium (whose 2022 was exceptionally positive) with -73%, Poland (-67%) and Germany (-58%).

Occupier markets also remained subdued: 12 out of the 15 monitored cities reported a year-on-year decrease in office take-up levels. This decline was particularly linked to the significant reduction in large transactions, as companies prioritize cost optimization. Nevertheless, we register positive data in a few markets, notably Rome with a strong growth (+58%), Amsterdam and Brussels with a substantial stability. Limited availability among central submarkets and new constructions validates the persistence of a strong demand for quality spaces and locations. However, considerably higher vacancy rates are observed in peripheral office districts.