Europe: Currencies, Stocks, and
Zeppelin Real Estate Analysis Limited
Recently your humble author has done some research on Europe¡¦s
currencies, stock markets, and real estate, and decided to share some of
the findings with readers:
these include published professional reports, government statistics, and
websites such as those of Cushman & Wakefield and Yahoo! Finance.
= they range from the West-North such as UK, France, Germany, Belgium, the
Netherlands, Sweden etc, via Austria, Switzerland, Czech Republic etc in the
centre, to Russia and Italy in the East and South respectively.
= compared to the US$, most European currencies have become higher albeit in
varying extent, despite there have been ups and downs along the way.
= as expressed by the various stock market indexes, most markets have
experienced gains recently, with that of the Czech Republic, Turkey etc
showing 40% or more. Belgium, Denmark, and the like have done well too with
Germany and France being steady. Russia has comparatively been lackluster
for the past year or so.
= these are based on their office and retail sectors, and many of the
countries in the study have shown signs of recoveries in recent times, such
as France and Germany, while others appear to be still in the doldrums, such
as Russia. There are also a few markets in which one sector seems to have
done better than the other. In terms of (prime) office rental rates, the UK
seems to lead the others, while for the (prime) retail rental rates, the UK,
France, Spain, and Ireland seem to harbor some of the highest rents in
little or no correlation between the various currency performances and their
respective stock market indexes
= and this is based on cross-market comparison, either in the positive or
negative directional sense.
also little or no correlation between the various stock market indexes and
their respective real estate markets
= i.e. observed performances in these stock markets give very little
indication of the real estate market performances, and vice versa.
some correlation between rental values and rental growths across markets
= especially with the office sector, and generally markets / cities having a
comparatively high office rental rate tend to have a comparatively high
retail rental rate too, though there are a few exceptions.
There is a
very strong correlation between office rental and retail rental yields
= with the R2 exceeding 0.90. In terms of nominal values, some markets have
single-digit yields while others have double-digit yields, yet by no means
this implies the latter being better for investments, as a high yield rate
may be indicative of high vacancies, low asset values, and / or poor economy
observations are only reflective of the overall situation in recent times,
and may not (or may) represent the long term trend, either past or future.
The article and/or content contained herein are for general reference only
and are not meant to substitute for proper professional advice and/or due
diligence. The author(s) and Zeppelin, including its staff, associates,
consultants, executives and the like do not accept any responsibility or
liability for losses, damages, claims and the like arising out of the use or
reference to the content contained herein.
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