22. Februar 2010 
Print
Print
2010 to see Moderate rises in take-up and investment volumes up across Europe
Office take-up in the main European cities is to rise moderately by 9% in 2010, according to BNP Paribas Real Estate. The leading global property adviser also forecast that the investment market will rise sharply with volumes up an average of 35% in 2010 across the major European cities.
The research covers Central London, Central Paris, Madrid, Berlin, Munich, Frankfurt, Milan and Brussels and measures office and investment indicators as well as looking ahead and forecasting what the markets can expect in 2010.
The recovery in the office market will be led by London with an expected 17% rise in take-up, while Central Paris and the German cities will see take-up levels stabilise after a year of dramatic falls of -28%. Madrid, Brussels and Milan suffered falls of between -30 and -60% in 2008 to 2009, and will experience a technical rebound in 2010. Office vacancy space will continue to rise however in the major European cities with occupiers not taking space, particularly in Grade B premises which will lead to a decline in grade B rents throughout 2010. Conversely, the headline rents of prime, grade A offices will stabilise in 2010, following a -14% decrease in 2009.
Tim Harlow, senior director in Client Solutions at BNP Paribas Real Estate UK, comments: “2009 was a challenging year for the occupational markets with every major European city experiencing declining take-up despite rents falling. 2010 will see a pick up in some markets and stabilisation across the others. London will lead the way in terms of take-up, with a corresponding growth in rents expected to be 7% in the second half of 2010, compared to a fall of -40% experienced between the end of 2007 and 2009; while Central Paris and the German cities can expect a new equilibrium in terms of take-up, with a corresponding stability in rental levels. In parallel, we will continue to see high levels of incentives being offered across Europe as landlords compete for the still limited occupational demand out there.”
Following somewhat of a rally in the investment markets in late 2009 with a rise in the volume of transactions in the second half of 75% across Europe, the overall fall in investment activity between late 2007 and end of 2009 was about 41% in the end, less than originally predicted. In 2010, investment volumes should rise by 35% with a further contraction of prime yields on 2009 levels where London saw prime office yields move from 6% to 5.50% in 2009 and Paris contract from 6.25% to 5.9%. Cities such as Madrid and Brussels will see more modest shifts in yields as these were hit hardest by the economic crisis.
Andrew Cruickshank, international investment senior director at BNP Paribas Real Estate UK, comments: “The investment market was buoyed in the second half of 2009 by both cash-rich buyers and some less stringent lending in Europe allowing investors to buy certain types of product. However, there is currently a lack of the type of product that is in demand by investors and hence there is competition for these prime, long-lease office buildings pushing values up and compressing yields. It will be interesting to see if more of this product comes to the market this year and sustains the bounce-back in the investment market or whether we will see another couple of quiet quarters.”
The research covers Central London, Central Paris, Madrid, Berlin, Munich, Frankfurt, Milan and Brussels and measures office and investment indicators as well as looking ahead and forecasting what the markets can expect in 2010.
The recovery in the office market will be led by London with an expected 17% rise in take-up, while Central Paris and the German cities will see take-up levels stabilise after a year of dramatic falls of -28%. Madrid, Brussels and Milan suffered falls of between -30 and -60% in 2008 to 2009, and will experience a technical rebound in 2010. Office vacancy space will continue to rise however in the major European cities with occupiers not taking space, particularly in Grade B premises which will lead to a decline in grade B rents throughout 2010. Conversely, the headline rents of prime, grade A offices will stabilise in 2010, following a -14% decrease in 2009.
Tim Harlow, senior director in Client Solutions at BNP Paribas Real Estate UK, comments: “2009 was a challenging year for the occupational markets with every major European city experiencing declining take-up despite rents falling. 2010 will see a pick up in some markets and stabilisation across the others. London will lead the way in terms of take-up, with a corresponding growth in rents expected to be 7% in the second half of 2010, compared to a fall of -40% experienced between the end of 2007 and 2009; while Central Paris and the German cities can expect a new equilibrium in terms of take-up, with a corresponding stability in rental levels. In parallel, we will continue to see high levels of incentives being offered across Europe as landlords compete for the still limited occupational demand out there.”
Following somewhat of a rally in the investment markets in late 2009 with a rise in the volume of transactions in the second half of 75% across Europe, the overall fall in investment activity between late 2007 and end of 2009 was about 41% in the end, less than originally predicted. In 2010, investment volumes should rise by 35% with a further contraction of prime yields on 2009 levels where London saw prime office yields move from 6% to 5.50% in 2009 and Paris contract from 6.25% to 5.9%. Cities such as Madrid and Brussels will see more modest shifts in yields as these were hit hardest by the economic crisis.
Andrew Cruickshank, international investment senior director at BNP Paribas Real Estate UK, comments: “The investment market was buoyed in the second half of 2009 by both cash-rich buyers and some less stringent lending in Europe allowing investors to buy certain types of product. However, there is currently a lack of the type of product that is in demand by investors and hence there is competition for these prime, long-lease office buildings pushing values up and compressing yields. It will be interesting to see if more of this product comes to the market this year and sustains the bounce-back in the investment market or whether we will see another couple of quiet quarters.”
