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Agents Predict Euro to Speed European Property Convergence

LONDON-The first business day of the new year saw euro notes and coins in the pockets of 300 million European consumers yesterday. Property has been traded in the common European currency for the past three years but the final adoption of the new currency poses challenges for the property markets, say agents.

By Graham Parker | Updated on January 03, 2002

LONDON-Over 300 million European consumers are now handling the unfamiliar euro notes and coins, and although the property industry has already had three years to get used to the euro, while it operated as a ‘virtual currency’, Economic and Monetary Union still poses challenges for the sector.

But new research from Jones Lang LaSalle concludes that it is only now that the full impact of the euro will be felt. Researchers Jeremy Kelly and Ben Sanderson believe that over the longer term EMU will impact fundamentally on occupier requirements, investment conditions and market practice.

In the short term they see a number of practical problems to be overcome, not least the matter of converting rents from the old domestic currencies to the euro. In Germany, for instance, the conversion rate is DM1.956 = €1. For the purposes of buying a cup of coffee a rough rate of DM2 = €1 works perfectly well, but converting the rent on a massive office building has to be done more accurately.

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