Office Property Pricing and Macroeconomic Shocks: European Regions through the Real Estate Cycle

Elmar Lang (), Ferdinand Mager () and Kerstin Hennig ()
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Elmar Lang: EBS Universität für Wirtschaft und Recht
Ferdinand Mager: EBS Universität für Wirtschaft und Recht
Kerstin Hennig: EBS Universität für Wirtschaft und Recht

International Real Estate Review, 2022, vol. 25, issue 2, 217-236

Abstract: We study the relation between European office prices and their fundamentals by using a panel dataset of 29 major European cities over 25 years. We control for the dotcom crisis, global financial crisis (GFC), and sovereign debt crisis to analyze the varying impact of our variables. We find real estate variables such as rent and vacancies to be the most important factors in explaining for office values. For the European Monetary Union, we find monetary policy measures played a considerable role only during the GFC. For Europe as a whole, monetary policy variables are less important. We document a strong negative linkage of the risk premium of investors to office prices during crisis times, but not in normal times. The dotcom crisis left European office prices almost unaffected. The German and Swiss office markets exhibit safe haven characteristics.

Keywords: European office properties; Real estate cycle; Crisis analysis; Macroeconomic shocks (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 G15 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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