Rents are falling and yields are rising across Europe, Middle East and Africa (EMEA) according to CB Richard Ellis's latest research.
CB Richard Ellis today announced the results of its Rent and Yield Indices for the first quarter of 2009.
It found that prime office rents across Europe fell in the first quarter of 2009 - the EU-15 area fell by 3.4% in the quarter, taking the year-on-year rate of growth to minus 4.1%.
Twenty eight of the 48 locations in the survey saw prime rent falls, one location increased and 19 remained unchanged. The largest falls occurred in Kyiv - down 33% to €357/sq m a year - and Moscow - down 20% to €918/sq m a year. The only increase was in Zagreb, where rents increased by 0.8% to €211/sq m a year.
In the retail sector, it found prime rents also fell. Its retail rent index for the EU-15 area fell by 1.3% in the quarter, taking the year-on-year rate of growth to 0.6%
Only one location in the survey saw an increase in the level of prime rent. The single increase occurred in Birmingham, where rents increased by 9% to €1,669/ sq m a year.
For industrial rents CBRE also recorded a fall with the rent index for the EU-15 area falling by 2.2% in the quarter, taking the year-on-year rate of growth to 4.6%.
But 24 of the 43 locations in the survey saw the level of prime rent remaining stable.
In terms of yields, office yields across Europe rose in the first quarter - by 19 basis points in the quarter across the region, and as a result is 107 basis points higher than a year ago.
Retail yields also rose in the quarter with the index for the EU-15 area recording a 24 basis points rise in the quarter, and as a result is 98 basis points higher than it was a year ago.
Industrial yields also rose 32 basis points in the quarter, and as a result is 120 basis points higher than a year ago for the EU-15 area.
Richard Holberton, director, EMEA research said: ‘The effects of the general deterioration in short-term economic prospects are very evident in the downward pressure on all the sector rent indices this quarter. This weakening in the rental outlook, along with loss of liquidity and higher risk premia, continues to cause repricing in the investment market. Yields continue to rise in most markets, although some parts of the UK market notably saw very modest movements and, in a couple of cases, negative shifts.’
The EU – 15 area comprises Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.