1. Greece: Hotels Thrive Despite Economic Headwinds
Hotels in Greece and its surrounding islands have recovered significantly from the pandemic, fueled by a surge in tourism, though the trend remains uneven across the region as some hoteliers experience labor shortages and other challenges.
Greek hotels appear to have outperformed industry forecasts so far this year, though some in Cyprus and other resort markets are seeing a slower bounce-back for tourism that relies on visitors from post-Soviet Union countries. A survey by the Bank of Greece showed the country had a 74.7% boost in first quarter international visitors compared with the year earlier, with revenue rising 28.6%.
2. UK: Food Stores Fuel Retail Investment Surge
Investor sentiment toward retail property remained largely positive in the first half of 2023 despite economic challenges, with investment reaching £2.89 billion thanks to increasing demand for food stores and a strong appetite for prime retail warehousing, according to brokerage Knight Frank.
Food store property deals totaled £1.07 billion in the first half, buoyed by two trades of a Sainsbury’s portfolio, with activity predicted to be sustained in the remaining six months of 2023 by major sale and leaseback programs from retailers Morrisons and Asda under new ownership. Knight Frank data showed a potential return of rent growth in the food store category, with supermarket tenants committing to higher rents on new build-to-suit facilities to support development viability.
3. Germany: Deal Volume Drops Two-Thirds in First Half
Disillusionment is spreading across the German commercial investment market after the first half of the year saw property sales total about 10 billion euros, a decline of about two-thirds from the year-earlier period and the lowest half-year total since 2012.
In addition to pricing issues, several brokerages said there is still uncertainty about the future of offices. Sales of office properties shrank by around 75% in the first half from a year earlier to just 3.2 billion euros, and there were only seven deals in the triple-digit million price range. Total sales forecasts for full-year 2023, covering all property categories, are now below 30 billion euros, according to JLL.
4. France: Commercial Properties Post Rough Second Quarter
French commercial property investment took a further nosedive in the second quarter after similar struggles in the first quarter, with transaction volumes hitting lows not seen since 2010.
"Activity continues to be slowed by the wait-and-see attitude of investors in the face of rising interest rates and further monetary tightening by central banks,” said Antoine Grignon, head of investment at brokerage Knight Frank France, which reported the country had a total of about 2.4 billion euros in second-quarter investment. The quarter brought France’s total since the start of 2023 to almost 6.2 billion euros, a fall of 40% compared to the 10-year average and a drop of 51% from the first half of 2022.
5. Canada: Ontario Caps Apartment Rent Increases at 2.5%
Canada’s largest province is capping increases for rent-controlled apartments at 2.5% for 2024, well below Ontario’s average inflation rate of 5.9%.
Economists said the move prevents landlords from keeping up with rising operating costs including property taxes, utilities and maintenance, but the ruling Conservative government appears to be sending an olive branch to inflation-weary consumers. The decision affects about 1.4 million Ontario rental households but does not apply to rental units occupied for the first time after Nov. 15, 2018, or vacant residential units.
6. US: UCLA Joins Universities Turning Underused Office Buildings Into Campus Space
UCLA is buying a mostly vacant office building in downtown Los Angeles, the latest university in the United States to shift into workspaces that have been underused since the pandemic struck.
University officials said UCLA bought the 334,000-square-foot Trust Building for an undisclosed price after prior owners struggled to lure tenants since COVID-19 cut office demand with the rise of remote work. From New York to Atlanta to Los Angeles, universities are transforming cubicles into classrooms as demand weakens for office space, reducing offering prices and attracting nonprofits and other untraditional buyers.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.