2009 review and 2010 outlook for commercial real estate in Europe

Nick Axford

The economic aftermath of the collapse of Lehman in September 2008 has been well documented and continues to unfold. Against a background of extreme uncertainty, investment decisions froze and most of the world´s major economies entered recession. Unemployment has risen sharply across Europe and is still rising; stock markets, asset prices and business and consumer confidence tumbled, and even now the flow of credit to businesses remains patchy.

The main elements of policy response were near-zero interest rates and state intervention roughly equivalent to a sixth of GDP in Europe and the US. Not surprisingly, these have had some stabilising effect. Recent economic data are more varied and suggest that some economies are resuming a growth path, albeit a gradual one. While many economies and real estate markets will therefore enter the new year with prospects apparently looking brighter than seemed likely even a few months ago, this has been a challenging year to say the least.