According to a report by Capital Economics the French and Polish commercial property markets are now undervalued by as much as 10-20%.

The Finnish, Hungarian, Italian, Spanish and Swedish markets meanwhile, all appear to be overvalued between 5% and 25%, with the German and Belgian markets correctly valued. This is in start contrast to the middle of 2008 when all European commercial property markets appeared to be overvalued.

Fergus Hicks, Capital Economics Property Economist, stated in the report: ‘ The Hungarian, Polish and UK commercial property markets all look undervalued. France also seems slightly undervalued, pushed up the ranking by stronger rental growth prospects. The Belgian and Spanish markets look around fair value, as does Finland, which slips down the ranking due to weaker rental growth prospects.’

Capital Economics predict that in the ten years to 2020 there will be strong rental value growth in Poland and France as their economies are forecasted to show reasonable recovery with GDP to grow by an average of 2.5% in Poland and 1.5% in France during 2010-11. Finland and Italy will be hindered by recession in 2010 which will result in weak rental value growth.