Â鶹ӳ»­

The volume of office transactions in Europe is set to rise to €65 bn by the end of 2015, the third-highest annual total since 2001, according to figures published by Catella.

The Swedish-based advisory firm said Europe’s economies were moving into a cyclical recovery fed by historically low interest rates, low commodity prices and spare capacity in the labour market.

The total amount of declared capital across all asset classes amounts to €500 bn, twice as much as before the 2008 crisis.

Out of 33 markets studied by Catella only one, the Finnish city of Oulu, showed rising yields, while 16 saw yields fall. Warsaw, Rotterdam and Lyon have the highest yields, while London’s West End and Stockholm have the lowest.

Catella also found top-level rents were stable in 17 markets while the remaining 16 were all predicted to show further increases.

However, the company cautioned that the slowdown in emerging markets, especially China, could impact on Europe's capacity to maintain growth through exports and bring the recovery to a halt within two years.

'All in all, Catella expects the current slowdown and the increasing financial turbulence in the emerging markets to push the global economy towards a mild economic downturn in 2017,' the latest Catella Market Indicator commented.

‘The economy is now in a situation where, after seven years of stagnation, households and companies have strong opportunities for consumption and investment. This will, of course, also support the real estate markets,’ said group head of research Thomas Beyerle.

‘Demand from investors for property will continue to rise and, as a result, returns will continue to fall. In such conditions, investors are willing to accept 'relative' losses in returns due to higher interest costs and lower returns on purchases. In addition to this, more capital than ever is flooding into Europe as new sources of capital in Asia and the Middle East turn their attention to the continent’s markets.’