Year-end forecast figures published by DTZ on Tuesday show an ongoing trend of stabilisation in rental values across the major European markets. The figures indicate five-year annualised rental growth of 1.8% for the office sector, 1.6% for retail and 1.1% for industrial. All sectors are demonstrating significant improvement compared to the previous five-year forecast period (from Q3 2009), reflecting DTZ's latest view that the economic outlook is normalising and will drive a more stable occupier market.
Year-end forecast figures published by DTZ on Tuesday show an ongoing trend of stabilisation in rental values across the major European markets. The figures indicate five-year annualised rental growth of 1.8% for the office sector, 1.6% for retail and 1.1% for industrial. All sectors are demonstrating significant improvement compared to the previous five-year forecast period (from Q3 2009), reflecting DTZ's latest view that the economic outlook is normalising and will drive a more stable occupier market.
DTZ forecasts that the office sector will be the first to return to rental growth in 2010 with 0.3%, retail markets with -0.2% and industrial -0.2%. Both office and industrial rental growth for 2010 have been upgraded from the previous forecasts (-1.7% and -1%) whilst the retail sector has been downgraded from 0.8%.
Fast market correction has played a large role in this trend and office property is the first to recover as it was the first to experience rental falls and new supply is becoming more limited. Key markets in the UK, France and Germany are forecast to return to growth in 2010 whilst the aggregated European figures are moderated by markets where the national economic outlook remains subdued.
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.'
