CNN has reported on 27 April 2023 that investment in European commercial real estate has fallen to its lowest level in 11 years. My previous blog (https://realestate.howardkennedy.com/post/102ibi8/watch-this-office-space-how-does-working-from-home-risk-commercial-real-estate) highlighted risks to the commercial real estate market due to high vacancy rates and falling demand for particularly office space as a result of hybrid working. CNN reports that the UK remains Europe's largest commercial real estate market but Paris has seen the most commercial real estate investment. It continues to be important to follow trends in the commercial real estate market to understand pressures on the real estate market and therefore the economy more generally.
Commercial real estate has become a focus for fresh concerns about financial stability, after sharp interest hikes, recession fears and declines in office occupancy and retail footfall following the Covid-19 pandemic heaped pressure on values. A recent JPMorgan investor survey cited commercial real estate as the most likely cause of the next financial crisis.