The highest growth rates for commercial property values among European metropolitan areas are likely to be recorded by those who have experienced deep downturns since the global financial crisis, according to a new report released by Moody’s Analytics.

The report, entitled ‘European Regional Forecasts: Comparative Advantage, Opportunities and Risks’, analyses the long-term potential for growth in Europe’s sub-regions, particularly in relation to real estate markets.

“Over the coming years, some of the best growth prospects for commercial real estate will be in the large metro areas that have gone through deep downturns, such as Milan, Rome, Madrid and Manchester. Smaller cities like Dublin and Copenhagen that also suffered deep recessions during the financial crisis will offer good growth opportunities as well,” says Steve Cochrane, managing director at Moody’s Analytics.

According to the report, the three-year outlook is positive for most Tier 1 metro areas (with a population of more than 2.5m). Peripheral cities such as Madrid and Lisbon are finally beginning to see some labour market recovery. “Thanks to a combination of wage cuts with other structural changes, labour markets in Spain and Portugal are now quite competitive and should enjoy strong job growth in coming years as the economy improves,” says Cochrane.