Offices will lead a return to rental growth over the next five years across European property markets, according to a forecast by DTZ.
In its end of year predictions the property services firm predicted that office rents would see the biggest average yearly increase over five years of 1.8%, while retail was expected to increase by 1.6% and industrial would rise by 1.1%.
The company said offices would be the first to return to rental growth next year with 0.3% increase, with -0.2% in the retail and industrial sectors.
Both office and industrial rental growth for 2010 have been upgraded from the previous forecasts of -1.7% and -1% respectively.
However, the retail sector has been downgraded from 0.8%.
DTZ said that office property would be the first to recover as it was the first to experience rental falls and new supply is becoming more limited.
It said that all sectors were demonstrating “significant improvement compared to the previous five year forecast period” and that the economic outlook is “normalising and will drive a more stable occupier market”.
Tony McGough, global head of forecasting, said: “Q4 2009 forecasts highlight a return to an increasingly stable rental environment across most of Europe.
“Moderate economic growth is forecast to return to most markets throughout 2010 and unemployment levels are forecast to level off.
“One effect of the crisis was a stalling of the development pipeline and those markets with a limited supply are those forecast to perform strongest when, albeit at very low levels, demand returns.”