Prime rents saw little change overall across Europe in Q2 2011. Retail rents rose by an average of 1.7%, mainly on the back of increases in Germany and France. Office rents were stable, although a number of key markets rose, including Stockholm and Amsterdam. Industrial rents eased very marginally, but the sector also saw the largest quarter-on-quarter yield reduction (22 basis points), reflecting improvement in the main German markets. Office and retail yields each saw declines of five basis points or less.
Richard Holberton, Director of EMEA Research at CB Richard Ellis, said: “In overall terms, the second quarter of 2011 represented a further milestone in the process of gradual value recovery in the European commercial property markets. The absence of any strong general movement in either rents or yields last quarter partly reflects the economic uncertainty caused by the deteriorating news on Greece and other peripheral economies.
“With the continuing threat of higher interest rates and bond yields, investors continue to assess pricing very closely, and investment turnover appears to be moderating. Equally, a much clearer pattern of change is emerging than had been the case, with most of the rent rises and yield reductions occurring in the stronger economic areas such as the Nordic markets, Germany and CEE, and the adverse changes mostly concentrated in the weaker southern European countries.”
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