The majority of retail rents across the EMEA region are set to remain flat, with investment volumes in 2012 lower than in 2011, Colliers International says in a research report published during the Mapic retail real estate fair in Cannes.
The majority of retail rents across the EMEA region are set to remain flat, with investment volumes in 2012 lower than in 2011, Colliers International says in a research report published during the Mapic retail real estate fair in Cannes.
During the six-month period to the third quarter of 2012, most prime high street rents across the key EMEA centres experienced no change or just a minor shift.
A few markets registered significant increases in prime rental rates, including St Petersburg (12.9%), Abu Dhabi (11.1%), Copenhagen (11.1%) and Vilnius (9.4%). Despite remaining flat during the period under review, London, Paris and Zurich are still the most expensive locations in the region.
Shopping centre prime rents in most monitored markets also remained stable. Notable increases took place in Dubai and Abu Dhabi (11.8%), followed by Frankfurt (6.9%) and Moscow (6.6%). The most significant drops were recorded in Madrid (-20%), Bratislava (-15.8%) and Milan (-10%).
Colliers reports that the European retail market remains stagnant with retail sales levels balancing around zero during the summer months. While the volume of retail trade in the eurozone dropped -0.2% in September from August, sales grew 0.1% across the EU. On an annual basis, 0.3% growth was recorded in the EU, but the eurozone continued to see negative trade levels (-0.8%).
Contrary to popular belief, the property adviser says, some of the markets are in a good condition. The highest year-on-year growth was recorded in Estonia (9.9%), Latvia (7.9%) and Luxembourg (7.1%), followed by Russia, Romania, Sweden and the UK. Healthy growth in retail sales in these countries has buoyed the overall results for the EU, counter-balancing the large drops in Southern Europe, particularly in Greece (-9.1% in July, y-o-y).
Major international fashion retailers continue their strong expansion, as do the discount and value retailers which are taking advantage of market conditions. The luxury sector continues to do well with numerous new stores opening across the region, Colliers says.
Lack of core product seems to be the main obstacle for investors, with overall retail investment volumes lower than in 2011.
