Â鶹ӳ»­

Real estate performance across much of Europe will likely weaken further in 2012 and recover slowly from 2013 onwards, according to RREEF’s European Real Estate Outlook published on Tuesday.

The real estate investment arm of Deutsche Asset Management expects capital values to be stagnant in the north of the continent and fall in the south over the coming 12 to 24 months. Subsequent growth should result mainly from a broader economic recovery and increasing rents.

RREEF predicts that retail, in particular prime shopping centres, will outperform over the next five years due to the combination of a relatively stable yield outlook and comparatively high income returns.

For office and logistics assets, the moderate mid-term yield decompression will likely have a negative impact on values but should be offset by increasing income streams starting in 2014.

Value growth in Southern Europe is likely to remain negative in 2012, resulting in weaker total returns. Top performers in the second half of the year are likely to include markets such as Dublin office or Spanish shopping centres.

Outside the eurozone periphery, RREEF expects London office to perform well over a five-year period along with offices in regional France and Warsaw as well as prime retail schemes in Central and Eastern Europe, the UK or Brussels. Germany is once again expected to substitute higher returns for greater resilience and the lowest levels of downside risk.