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Reuters
17-07-2025
- Business
- Reuters
European real estate stuck in 'zombieland' as recovery proves elusive
LONDON/FRANKFURT, July 17 (Reuters) - Europe's commercial real estate market is defying expectations of a recovery as investor caution pins property sales to near-decade lows. Some investors and banks, recognising that the outlook remains weak, are even beginning to step in to offload or restructure distressed assets, one executive said, though they added that an "extend and pretend" approach to bad debts is still commonplace. It is a marked change in mood from the beginning of 2025 when there were hopes for an end to a three-year pandemic-induced downturn, but unpredictable U.S. trade policy, the promise of stronger returns in other private markets and a refusal by sellers to recognise lower prices have hit activity. Year-on-year commercial property sales in Europe were flat in the first quarter of 2025 at 47.8 billion euros ($55.6 billion), less than half the level of three years earlier, according to the latest revised MSCI data. Early indicators suggest a poor second quarter - cross-border investment into property in Europe, the Middle East and Africa fell about a fifth from a year earlier to 17.2 billion euros, the worst April-June period in a decade, property agency Knight Frank said, citing preliminary MSCI data. Sluggish sales have affected most sectors including hard-hit offices and even data centres, a previous bright spot, although the under-supplied rental housing market continues to attract interest. "We have 'zombieland' ... no recovery, stranded assets, no liquidity coming back," said Sebastiano Ferrante, head of European real estate at U.S. fund giant PGIM. While logistics and hotels also presented buying opportunities, out-of-town offices and old shopping malls are among assets struggling to find buyers, Ferrante added. Canada's Brookfield ( opens new tab asked bondholders to approve the restructuring of a loan secured against its London CityPoint office tower in April, according to a regulatory filing, after shelving a sale when bids fell short of its expectations. In Germany, one of the country's most prominent property casualties - the Trianon skyscraper in Frankfurt - has been put up for sale by its administrator, Reuters reported last week, in a rare test of the fragile German market. There is also fierce competition for funds from other private markets such as credit. Private credit funds in Europe raised $39.9 billion in the first half of 2025, nearly double the $20.6 billion for real estate funds, according to Preqin data. However, both were on track to top their 2024 totals, with property already ahead of last year's poor tally. Survey data nonetheless points to ongoing caution. Investor sentiment towards European real estate fell to its lowest in over a year in June, according to trade body INREV, mirroring the U.S. market, where sentiment has also soured this year. "In some parts of the market the recovery is well under way... However there are out of favour assets and sectors where there is almost no liquidity and more pain to come," said Cecile Retaureau, head of private markets at the investment arm of insurer Phoenix (PHNX.L), opens new tab. Germany, Europe's largest economy, has been particularly hard hit by the property slump, with sales down another 2% in the first half of this year, according to data from CBRE. "Transaction volumes will not jump. It will not kickstart in a very dynamic way," said Konstantin Kortmann, CEO of property agency JLL in Germany, who expects a gradual recovery. While still-high interest rates mean property investors have to be selective to make money, the prospect of international cash shifting to Europe from the volatile U.S. market could help, the property executives said. At least two of PGIM's German clients have cancelled planned property investments in the United States, reprioritising Europe and Asia, Ferrante said. ($1 = 0.8602 euros)
Free Malaysia Today
08-07-2025
- Business
- Free Malaysia Today
Bursa ends lower amid renewed investor caution
KUALA LUMPUR : Bursa Malaysia closed lower today, reversing last week's gains, as regional markets weakened amid renewed investor caution ahead of the July 9 tariff deadline, analysts said. The local bourse tracked losses across Asia as investors await US President Donald Trump's final decision on trade deals. At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 12.65 points, or 0.82%, to 1,537.54, down from last Friday's close of 1,550.19. The benchmark opened 5.45 points lower at 1,544.74 and touched an intraday low of 1,534.67 in early trade. Market breadth was negative, with 754 decliners outpacing 260 gainers. A total of 466 counters were unchanged, while 944 were untraded and 19 suspended. Turnover rose to 3.57 billion shares worth RM2.49 billion, compared with 3.43 billion shares worth RM2.47 billion on Friday. UOB Kay Hian Wealth Advisors head of investment research Sedek Jantan said trade tensions resurfaced after Trump reaffirmed his intention to impose unilateral tariffs on a broad range of countries. 'This has reignited uncertainty across global markets, dampening sentiment and triggering a risk-off tone,' he told Bernama. He said all sectoral indices on Bursa ended in negative territory. 'Nonetheless, total trading volume remained elevated, surpassing the three billion shares mark – signalling sustained retail and institutional participation despite prevailing uncertainty,' he added. Meanwhile, Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng described the day's profit-taking as a healthy correction, allowing the market to consolidate its recent gains and establish a firmer base for a sustainable uptrend. 'We believe that as long as the benchmark index stays above the 1,530 level, the mid-term rally remains intact. As such, we expect the FBM KLCI to trend between 1,530 and 1,560 this week, marking its support and resistance levels,' he said. Among heavyweights, Maybank and CIMB each slipped 2 sen to RM9.72 and RM6.75 respectively, Public Bank fell 5 sen to RM4.33, Tenaga Nasional dropped 26 sen to RM13.80, and IHH Healthcare eased 3 sen to RM6.72. In active trade, NexG rose 2 sen to 42 sen, NationGate declined 15 sen to RM1.63, Zetrix AI fell 4.5 sen to 95 sen, while Tanco added 0.5 sen to 89.5 sen. On the index board, the FBM Emas Index declined 99.06 points to 11,518.66, the FBMT 100 Index dropped 97.47 points to 11,293.23, and the FBM Emas Shariah Index fell 117.09 points to 11,500.73. The FBM 70 Index sank 163.59 points to 16,623.45, while the FBM ACE Index lost 52.78 points to 4,473.62. By sector, the financial services index narrowed 69.26 points to 17,721.96, the industrial products and services index edged down 1.67 points to 155.41, and the plantation index eased 3.73 points to 7,445.01, while the energy index ticked down 4.02 points to 737.59. Main Market volume fell to 1.47 billion units worth RM2.16 billion from 1.96 billion units valued at RM2.25 billion on Friday. Warrants turnover increased to 1.83 billion units valued at RM228.26 million from 1.20 billion units worth RM126.56 million previously. ACE Market volume eased to 267.85 million units valued at RM112.77 million versus 274.38 million units worth RM90.83 million last Friday. Consumer products and services counters accounted for 153.71 million shares traded on the Main Market, industrial products and services (250.64 million), construction (132.18 million), technology (259.83 million), SPAC (nil), financial services (58 million), property (205.11 million), plantation (14.87 million), REITs (15.46 million), closed-end fund (4,000), energy (73.42 million), healthcare (171.72 million), telecommunications and media (26.74 million), transportation and logistics (23.95 million), utilities (88.33 million), and business trusts (156,700).
