Global Capital Flows - Real Asset Investment Briefings · CAPITAL FLOWS & OUTLOOK Money, Markets...
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CAPITAL FLOWS & OUTLOOK Money, Markets and Manifestos Dec 2019 Damian Harrington Director, Head of Research - EMEA
Transcript of Global Capital Flows - Real Asset Investment Briefings · CAPITAL FLOWS & OUTLOOK Money, Markets...
CAPITAL FLOWS & OUTLOOKMoney, Markets and Manifestos
Dec 2019
Damian Harrington Director, Head of Research - EMEA
Colliers International 2019
Outline
Global Trends
European Capital Flows
Sectoral Differences
Elections & Manifestos
2020 & Beyond
2
Global Asset Prices/Economy
0
20
40
60
80
100
120
140
160
07Q
4
08Q
3
09Q
2
10Q
1
10Q
4
11Q
3
12Q
2
13Q
1
13Q
4
14Q
3
15Q
2
16Q
1
16Q
4
17Q
3
18Q
2
19Q
1
19Q
4
20Q
3
21Q
2
22Q
1
22Q
4
No of Deals Volumes Global GDP
GLOBAL INVESTMENT VOLUMES, DEALS AND GDP
Source: Colliers/RCA
4COLLIERS INTERNATIONAL | 2019
Americas
EMEA
AsiaPac
US
$ B
illio
ns
GLOBAL INVESTMENT VOLUMES BY REGION
Source: Colliers/RCA
VOLUMES/GDP BY GLOBAL REGION
GLOBAL TRENDS
3
4
5
6
7
8
9
200
7 Q
1
200
7 Q
4
200
8 Q
3
200
9 Q
2
201
0 Q
1
201
0 Q
4
201
1 Q
3
201
2 Q
2
201
3 Q
1
201
3 Q
4
201
4 Q
3
201
5 Q
2
201
6 Q
1
201
6 Q
4
201
7 Q
3
201
8 Q
2
201
9 Q
1
201
9 Q
4
202
0 Q
3
202
1 Q
2
202
2 Q
1
202
2 Q
4
202
3 Q
3
US
$ T
rilli
ons
GDP GROWTH BY GLOBAL REGION
Americas Asia Pacific Europe
5COLLIERS INTERNATIONAL | 2019
European Yield Gains: for International Buyers
EUROPEAN TRENDS
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Local yield - EU yield 5yr Hedging Gain/Loss Hedging Impact on Yield Premiums
6COLLIERS INTERNATIONAL | 2019
Changing Fortunes: EMEA Volumes by Country
EUROPEAN TRENDS
Source: Colliers/RCA
0
10
20
30
40
50
60
70
80
90
100S
ep-0
7
Se
p-0
8
Se
p-0
9
Se
p-1
0
Se
p-1
1
Se
p-1
2
Se
p-1
3
Se
p-1
4
Se
p-1
5
Se
p-1
6
Se
p-1
7
Se
p-1
8
Se
p-1
9
€ b
illio
ns
France Germany United Kingdom
7COLLIERS INTERNATIONAL | 2019
Volumes: Major city markets peaking
EUROPEAN TRENDS
Source: Colliers/RCA
Madrid
Helsinki
Warsaw
Leipzig
Utrecht
Stuttgart
Lisbon
The Hague
ParisBerlin
Frankfurt
Stockholm
AmsterdamDublin
Vienna
Dusseldorf
Barcelona
Malmo (Helsinborg)
GothenburgRome
London
Hamburg
Munich
Oslo
Milan
Birmingham
Manchester
Copenhagen
Brussels
Zurich
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
0.5 1.0 2.0 4.0 8.0 16.0 32.0
Gro
wth
in
acti
vit
y
Current Market size (EUR Bn)
Recent performance vs long term average: 1yr vs 5yr
8COLLIERS INTERNATIONAL | 2019Source: Colliers/RCA
YIELDS BY CITY
EUROPEAN TRENDS
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Mu
nic
h
Fra
nkfu
rt
Be
rlin
Ham
bu
rg
Ma
dri
d
Stu
ttg
art
Dusse
ldo
rf
Co
log
ne
Am
ste
rda
m
Pa
ris
Sto
ckho
lm
Co
pen
hag
en
Lon
do
n -
West
End
Ba
rce
lon
a
Mila
n
Lon
do
n -
City
Wa
rsa
w
Bir
min
gh
am
Pra
gu
e
Rom
e
Bri
sto
l
Ma
nch
este
r
Wro
cla
w
Lee
ds
Ed
inb
urg
h
Rott
erd
am
Gla
sg
ow
Kra
ko
w
Po
zn
an
Mo
sco
w
StP
ete
rsbu
rg
%
Gross vs ‘Double Net’ Yield Spread
Gross InitialNet InitialDouble Net
9COLLIERS INTERNATIONAL | 2019
Office Occupier Markets – Demand vs. Supply
EUROPEAN TRENDS
Source: Colliers/RCA
Sofia
Paris
Berlin
Cologne
Hamburg
Munich
Stuttgart
Athens
Budapest
Dublin
MilanAmsterdam
Oslo
Barcelona
Birmingham
Bristol
Leeds
London
Manchester
Prague
CopenhagenDusseldorf
Frankfurt
Lisbon
Moscow
Madrid
StockholmCairo
Rome
Rotterdam
Warsaw
Bucharest
Bratislava
Istanbul
Abu Dhabi
Dubai
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1.0% 2.0% 4.0% 8.0% 16.0% 32.0%
An
nu
al
Ab
so
rpti
on
vs A
vail
ab
ilit
y
Vacancy rate
Landlord Neutral Tenant
10COLLIERS INTERNATIONAL | 2019
EUROPEAN TRENDS
I&L Occupier Markets
Source: Colliers
11COLLIERS INTERNATIONAL | 2019
Capital Value Indices - Europe
EUROPEAN TRENDS
Source: Colliers/RCA
60
80
100
120
140
160
180
Jun
-08
Jun
-09
Jun
-10
Jun
-11
Jun
-12
Jun
-13
Jun
-14
Jun
-15
Jun
-16
Jun
-17
Jun
-18
Jun
-19
Cap V
alu
e Index (
2008=
100)
All sector Cap Value Index Office CBD Cap Value Index
Log & Dist Cap Value Index TSC Cap Value Index
60
80
100
120
140
160
180
Jun
-08
Jun
-09
Jun
-10
Jun
-11
Jun
-12
Jun
-13
Jun
-14
Jun
-15
Jun
-16
Jun
-17
Jun
-18
Jun
-19
Cap V
alu
e Index (
2008=
100)
All sector Rent Index Office CBD Rent Index
Log & Dist Rent Index TSC Rent Index
12COLLIERS INTERNATIONAL | 2019
Retail Space vs Retail Spend (goods)
MAPIC Research
20.5%
1.5%
24.0%
52.0%
Shopping
Centres (large
TSCs 4%)
Retail
Park/WarehouseEverything
elseGrocery stores
(Super/hypermarkets)
Source: Colliers/ICSC/GFK
Retail Spend Retail Space
11.0%
8.0%
35.0%9.0%
37.0%
Shopping Centres
(ex. F&B/services)
Grocery stores
(Super/hypermarkets)
Retail Park/
WarehouseEverything
else
On-line
13COLLIERS INTERNATIONAL | 2019
Retail Spending: How/Seasonality
MAPIC Research
-15
-10
-5
0
5
10
15
BE PL FR NL IT BG AT HU ES PT FI SE SK DE NO CH CZ DK RO UK
November Sales: Shift in Activity 2015
2015
-10
-5
0
5
10
15
20
BE PL FR NL IT BG AT HU ES PT FI SE SK DE NO CH CZ DK RO UK
November Sales: Shift in Activity 2015
2018
Omnichannel/CnC Driving Online Sales
14COLLIERS INTERNATIONAL | 2019
Spending on F&B
MAPIC Research
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
F&B Growth Rates %: 2019
0.00%
5.00%
10.00%
15.00%
20.00%
Eating Out (F&B) as % of HDI: 2019
15COLLIERS INTERNATIONAL | 2019
Tourism: expanding and driving retail/leisure
MAPIC Research
Source: Colliers/Ourworldindata.org/tourism
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Bill
ions
International arrivals by world region
Africa Americas Asia & Pacific Europe Middle East
16COLLIERS INTERNATIONAL | 2019
EUROPEAN TRENDS
Mixed-use: Porta Nuova - Milan
SGR Fund 14.1% return vs 5.2% (MSCI)
(62 Italian funds monitored)
Fund focused explicitly on the 1million sqm
mixed-use redevelopment. Since 2010
• Residential rents: 25%+
• Office rents 70%+
• Retail rents: 200%+
17COLLIERS INTERNATIONAL | 2019
EUROPEAN TRENDS
Source: Colliers/Centre for Cities
PARIS42%
Inner Suburbs
37%
Outer Suburbs
21%
2% of demand shifted from
Paris to ‘inner suburbs’
• 68 New metro stations
• 200 Km of new metro lines
• €38 bn Estimated investment
Saint-Quentin-en-
Yvelines Sector Southern 2nde
Suburb
Cergy
Sector
Roissy
Sector
Marne-la-Vallée
Sector
La Défense
Central Paris
Versailles Chantiers
Aéroport d’Orly |2024
CDG T2
Le Bourget RER |2027Saint-Denis Pleyel |2024
Nanterre la Folie |2030
Saint-Lazare |2021
Gare de l’EstRosny – Bois Perrier | 2027
Noisy-Champs |2024
+2%
-2%
Paris: Le Grand Express
Back on point: UK - panto season……
18
EUROPEAN TRENDS
Geopolitics: Conservative Manifesto
• Getting Brexit done: out by Jan 31st; trade deal with
the EU next year by December 2020 – a budget in 100 days
• Points-based immigration system: ‘brightest
and the best’
• Cutting emissions to zero by 2050: (not 2045
or 2030) – supporting wind farms; electrified vehicles (petrol &
diesel banned); home boiler replacements and insulation a
huge undertaking
• Infrastructure: £2bn for potholes, £29bn for roads:
reaffirming commitment to the car.
• New rail line linking Manchester – Leeds: …..to be complete before 2040.
• Maintain "triple lock" state pension: so
increase by highest of CPI, wage growth or 2.5% each year
• No increase in income tax, VAT or National Insurance
• Fix the crisis in social care: via cross-party
consensus first..no immediate funding (£1bn plaster).
• Spend £6.3bn on 2.2mn: on disadvantaged
(social) homes = £2,860 per household
• Universal credit: ending freeze on benefits = 1.7%
increase in ‘money’ next April; national strategy for disabled
people promised by the end of 2020.
• 20,000 additional police officers; 50,000
more nurses: by reintroducing maintenance grants of
between £5,000 and £8,000 a year for students inc foreign
recruitment
• Create 250,000 extra childcare places: during the holidays for primary school-age children – mostly
through existing schools.
• Look at the constitutional power balance between the three institutions of state, the executive
(government and crown), Parliament and the judiciary.
EUROPEAN TRENDS
Geopolitics: EuropeWill the sovereigntists lose?
• Agenda for closer political union becoming more transparent
• Monetary policy “cannot and should not be the only game in town.”
• Fiscal drive “It’s time (for governments) to get spending.
• 0.1% increase in GNI to support budget – a 10% increase
• A shift to greener policies likely, given change in MEP allegiances
12th & 13th Dec: EC Heads of State meeting
EUROPEAN TRENDS
21COLLIERS INTERNATIONAL | 2019
GDP 2020 Forecast
EUROPEAN TRENDS
3.0 - 4.5%
2.0 - 3.0%
1.0 - 2.0%
0.0 – 1.0%
IEUK
NL
BE
CHFR
PT
BG
HU
LV
RU
NO
FI
SK
RO
CZ
LT
PL
IT
AT
ES
DE
SE
DK
SR
TU
UKR
GR
CYMA
BH
HR
EE
SL
LU
Long-term Demographic Shifts Short-term Labour Market Squeeze
-3%
-2%
-1%
0%
1%
2%
3%
4%
Tu
rke
y
Russia
Rom
an
ia
Po
lan
d
Italy
Sw
itze
rlan
d
Czech
Rep
ublic
Fra
nce
Sw
ed
en
No
rwa
y
Ge
rma
ny
Eu
rop
ea
n U
nio
n
Po
rtug
al
Den
ma
rk
Un
ite
d K
ing
do
m
Au
str
ia
Be
lgiu
m
Fin
land
Slo
va
k R
ep
ub
lic
Hun
ga
ry
Gre
ece
Ne
the
rlan
ds
Sp
ain
Ire
lan
d
Forecast Employment Growth: 2019 (vs 2018)
Occupier Markets – Demand/Labour Capacity
EUROPEAN TRENDS
Source: Colliers/OxfordEconomics
Challenges & Opportunities
EUROPEAN/GLOBAL TRENDS
Source: Colliers/RCA
INCOME
INEQUALITYPUBLIC
SERVICESCONSCIOUS
CONSUMERS
EMPLOYMENT /
PRODUCTIVITY
MONEY /
PENSIONS
RELEVANT
INFRASTRUCTURE
CONSTRUCTION
COSTS / METHODS
TECHNOLOGY /
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