Although the overall economic outlook in Europe is rather dim, the same is not so for commercial property investments on the continent. The latest figures published by CBRE have revealed prime rents and yields were "broadly stable" during the second quarter of the year. Yields for offices, retail and industrial assets all increased slightly during the three months from April to June. The retail sector saw the lowest rise, of just two basis points, while industrial real estate climbed by four basis points and offices by six basis points.
In terms of rents, it is retail properties that have made the biggest gains, with the cost of leasing such premises four per cent higher than it was a year ago. Office rents only managed a 0.25 per cent annual gain, while industrial assets saw their rental value fall by one per cent in the same period. Director of Europe, the Middle East and Africa (EMEA) research at CBRE Richard Holberton explained rents tend to be influenced by "local dynamics" rather than investor confidence.
"With leasing and investment activity both prone to the effects of fragile sentiment, adjustments in prime rents and yields remain very gradual. In part, the apparent stability reflects a limited flow of transactional evidence, but the pattern of yield changes also increasingly reflects investor aversion towards markets most at risk from the eurozone debt crisis," he stated.
According to preliminary data published earlier this month by Jones Lang LaSalle, every global region saw commercial real estate investment volumes improve in the second quarter of this year, compared to the first three months of the year. In the EMEA, a quarterly increase in transactions was recorded, although this was down on an annual basis. The firm predicted cash-rich buyers will continue to dominate the investment landscape, while the focus on prime assets will continue.
- Thursday 19 July 2012