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24. Januar 2012 
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Rents and yields for prime property remain stable
Prime rents and yields for European commercial property remained broadly stable in the final quarter (Q4) of 2011, despite continued economic uncertainty and negative sentiment across Europe, according to new figures released by CB Richard Ellis. European prime yield trends have remained stable for several quarters, moving up by no more than 10 basis points in any property sector throughout 2011, while rents in the office and industrial sectors have risen by less than 1% over the same period.
Notably prime yields for office and industrial property, which had been falling slightly over the past few quarters, rose in Q4 2011. The increases during Q4 were extremely small, up by between two and four basis points, but they reflect the impact of a worsening short-term economic picture on property pricing and investor sentiment. However, the tentative nature of this change is underlined by the fact that yields rose in only 17 out of 145 markets, with the increases mainly concentrated in major Western European countries, including Belgium and The Netherlands as well as regional UK cities.
Continuing the pattern of recent quarters, prime rents saw virtually no change in any property sector across Europe in Q4 2011. The CBRE EU-15 Prime Rent Indices for office and industrial properties remained unchanged during Q4, and the retail index rose by 0.6%. There was little geographic pattern to the rental increases this quarter, except that parts of the Nordic region and CEE saw some growth.
Richard Holberton, Director of EMEA Research at CBRE, said: “The overwhelming picture is one of stability, with movements in value both small and sporadic. To some extent this demonstrates the resistance of at least the prime end of the market to growing economic weakness, but it also reflects a degree of nervousness among both occupiers and investors that is constraining any upward progression in the market. The slight increase in yields actually took place against the background of higher investment activity in the fourth quarter however, with yields in many markets already below their 10-year averages, this quarter’s evidence is not necessarily indicative of further yield appreciation in the short term.”
Yields
Office yields across Europe rose marginally during Q4 2011. The CBRE Prime Office Yield Index for the EU-15 increased by two basis points in the quarter, but still remains ten basis points below the level of the same quarter last year. Five of the 53 markets surveyed saw downward yield movements this quarter, 41 remained unchanged, and seven saw an increase. The largest decreases were in Marseille (down 25 basis points to 5.75%) and Bucharest (down 25 basis points to 8.25%). Zurich recorded a ten basis point fall, while the remaining decreases were of five basis points or less. The largest increase was the 50 basis point rise seen in Brussels.
Retail yields ticked downward in Q4 2011, with the CBRE EU-15 Prime Retail Yield Index falling by three basis points to 4.94%. Three of the 49 markets surveyed saw downward yield movements this quarter, 45 remained unchanged, and one saw an increase. The largest notable decrease was in London’s West End (down 25 basis points to 3.25%), while the largest increase was for Dubai (up 25 basis points to 8.50%).
Industrial yields edged slightly higher over Q4 2011, with the CBRE Prime Industrial Yield Index for the EU-15 rising by four basis points to 7.60%, but still remaining seven basis points lower on the year. Three of the 44 markets surveyed saw downward yield movements this quarter, 32 remained unchanged, and nine saw an increase. The largest decrease was recorded in St. Petersburg, where yields fell by 50 basis points to 14.00%. London saw a fall of 25 basis points, while increases of 25 basis points were observed in Brussels, Copenhagen, Milan, Rome, and in UK regional cities.
Notably prime yields for office and industrial property, which had been falling slightly over the past few quarters, rose in Q4 2011. The increases during Q4 were extremely small, up by between two and four basis points, but they reflect the impact of a worsening short-term economic picture on property pricing and investor sentiment. However, the tentative nature of this change is underlined by the fact that yields rose in only 17 out of 145 markets, with the increases mainly concentrated in major Western European countries, including Belgium and The Netherlands as well as regional UK cities.
Continuing the pattern of recent quarters, prime rents saw virtually no change in any property sector across Europe in Q4 2011. The CBRE EU-15 Prime Rent Indices for office and industrial properties remained unchanged during Q4, and the retail index rose by 0.6%. There was little geographic pattern to the rental increases this quarter, except that parts of the Nordic region and CEE saw some growth.
Richard Holberton, Director of EMEA Research at CBRE, said: “The overwhelming picture is one of stability, with movements in value both small and sporadic. To some extent this demonstrates the resistance of at least the prime end of the market to growing economic weakness, but it also reflects a degree of nervousness among both occupiers and investors that is constraining any upward progression in the market. The slight increase in yields actually took place against the background of higher investment activity in the fourth quarter however, with yields in many markets already below their 10-year averages, this quarter’s evidence is not necessarily indicative of further yield appreciation in the short term.”
Yields
Office yields across Europe rose marginally during Q4 2011. The CBRE Prime Office Yield Index for the EU-15 increased by two basis points in the quarter, but still remains ten basis points below the level of the same quarter last year. Five of the 53 markets surveyed saw downward yield movements this quarter, 41 remained unchanged, and seven saw an increase. The largest decreases were in Marseille (down 25 basis points to 5.75%) and Bucharest (down 25 basis points to 8.25%). Zurich recorded a ten basis point fall, while the remaining decreases were of five basis points or less. The largest increase was the 50 basis point rise seen in Brussels.
Retail yields ticked downward in Q4 2011, with the CBRE EU-15 Prime Retail Yield Index falling by three basis points to 4.94%. Three of the 49 markets surveyed saw downward yield movements this quarter, 45 remained unchanged, and one saw an increase. The largest notable decrease was in London’s West End (down 25 basis points to 3.25%), while the largest increase was for Dubai (up 25 basis points to 8.50%).
Industrial yields edged slightly higher over Q4 2011, with the CBRE Prime Industrial Yield Index for the EU-15 rising by four basis points to 7.60%, but still remaining seven basis points lower on the year. Three of the 44 markets surveyed saw downward yield movements this quarter, 32 remained unchanged, and nine saw an increase. The largest decrease was recorded in St. Petersburg, where yields fell by 50 basis points to 14.00%. London saw a fall of 25 basis points, while increases of 25 basis points were observed in Brussels, Copenhagen, Milan, Rome, and in UK regional cities.
Fotos: CBRE, CBRE
