Scarcity in European Real Estate Markets

This technical report outlines the analysis conducted by DWS regarding supply-constrained real estate markets in Europe, focusing on the immediate and long-term supply outlook. It identifies key sectors, including residential, logistics, and office space, which exhibit varying degrees of supply constraints and potential rent growth. The report emphasizes that the residential sector is currently the most supply-constrained, particularly in major cities like Berlin and Munich, where vacancy rates are near zero. The logistics sector also faces challenges, with limited high-quality stock available despite a recent uptick in new supply. The office market shows significant differences between various submarkets, with markets like London West End and Paris CBD facing tight conditions leading to upward pressure on rents. Additionally, the report discusses factors influencing future supply and rent growth, such as construction costs, vacancy rates, and regulatory barriers. This document serves as a framework for investors and developers to navigate the complexities of supply and demand in the European real estate landscape.