09 gennaio 2009

«The re-pricing that has been a recent feature of Europe Middle East and Africa (EMEA) markets continued in the fourth quarter of 2008. Yields in the office, retail and industrial sectors have all now risen 100 basis points or more since mid-2007. The scale of the re-pricing could help to close the gap between buyer and seller pricing expectations and is likely to present attractive buying opportunities for equity-rich investors targeting the commercial real estate market.

Prime office yields continue to be particularly affected by the turmoil in the debt and investment markets and were driven up by 41 basis points in the fourth quarter, according to The CB Richard Ellis EU-15 office yield index. As a result, they are now nearly 100 basis points higher than a year ago. Forty-two of the 47 locations surveyed saw upward yield movements with the largest rises occurring in Kiev and Dublin. A number of other key markets - including Paris, Brussels, Moscow, Vienna and the City of London - saw increases of over 50 bps in the quarter.

The fourth quarter also witnessed yield increases in both the retail and industrial sectors. The CB Richard Ellis retail yield index for the EU-15 area rose by 31 basis points in the quarter, and as a result is 78 basis points higher than the fourth quarter 2007. In the industrial sector, the CB Richard Ellis industrial yield index for the EU-15 area rose by 35 basis points in the fourth quarter, and is almost 100 basis points higher than this time last year.

Richard Holberton, Director CB Richard Ellis EMEA Research and Consulting, said: "The combined effects of the various upheavals in financial markets in the fourth quarter of last year, and the weakening economic outlook, are clearly evident in the near-universal rise in yields. In addition to reduced liquidity, pricing is increasingly reflecting the prospect of weaker occupier demand, and hence lower income growth potential in many locations. However, with yields in the three main commercial sectors now having risen by 100 basis points or more since mid-2007, the scale of re-pricing is also likely to present attractive buying opportunities for equity investors in 2009."

The weakening rental outlook for the year ahead is clearly one of the factors influencing yield movements. Inevitably there are growing indications of downward pressure on rents in a number of countries as the continued financial uncertainty reduces confidence in the occupier markets. Despite this, the annual rental growth rates for the office and retail sectors remained in positive territory in the fourth quarter with the industrial sector showing a slight decline.

The CB Richard Ellis office rent index for the EU-15 area fell by 2% in the quarter, although the year-on-year rate of growth remains marginally positive at 0.4%. Two of the 47 locations in the survey saw increases in the level of prime office rents, 19 declined and 26 remained unchanged. The largest declines were recorded in Kiev down by 29.4% to €526 per sq m per annum, and Tel Aviv down 28.5% to €219 per sq m per annum. Other major cities including Moscow, Warsaw and London’s West End market also saw double –digit declines in the quarter.

Despite negative sentiment from the consumer sector, prime retail rents across EMEA remained broadly stable in the quarter. The CB Richard Ellis retail rent index for the EU-15 area rose by 0.3 % in the quarter, taking the year-on-year growth rate to 2.8%. Two (Lyon and Vienna) of the 40 locations surveyed saw increases in the level of prime retail rents, seven declined and 31 remained unchanged.

Rents in the industrial sector also remained broadly stable. The CB Richard Ellis industrial rent index fell by 0.4% in the quarter, leaving the index 1.3% lower in year-on-year terms. Six of the 40 locations surveyed saw increases in the level of prime rent, seven declined and 27 remained unchanged. The largest rises occurred in Edinburgh with rents up 7.4% to €83.06 per sq m per annum and Warsaw up 6.7% to €76.80 per sq m per annum.

Richard Holberton continued: "While the annual growth rates for the office and retail sectors remain positive there is a growing incidence of actual rental declines as occupier confidence continues to weaken. This reflects widespread occupier caution stemming from the general economic uncertainty." » (CS della Società)