ING Real Estate is projecting that retail sales growth will remain positive, and demand for retail space remain high in central and Eastern Europe, in particularly the Czech Republic, Poland, Slovakia and Romania.
At the launch of it European Retail View report at MAPIC, the property investment, finance and development firm also declared prospects in Portugal to be ‘relatively buoyant’ as retail sales are still on the rise; while Finland ‘may also have potential owing to its reliance on exports to Russia, where economic growth is still strong’.
ING predicted that prime high street retail and prime shopping centres would be the most resilient sub-sector of the market, as retailers aim for the best units in the best locations. It expects rental levels to remain firm in most prime locations, before picking up by 2010.
However, ING painted a gloomy picture fo the UK.
‘The retail environment in the UK is difficult, with retailers of big ticket, bulky goods items feeling the pain the most so far, although some in the clothing and footwear sectors, operating on tight margins, have also suffered. As a result, retail rental value growth has already slowed sharply from a peak of 4% per annum in August 2007 to just 0.8% pa by September 2008.’
The report added: ‘Rental growth [in the UK] is expected to fall over the net two years, with standard shops likely to see the largest falls, closely followed by retail warehousing sector.’