European Retail Property – light at the end of the tunnel?
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Executive summary • After two years of turmoil, there is
growingevidence of light at the end of the tunnel for theEuropean
retail property market. However, thislight could merely be an express
train coming inthe opposite direction. • There is a significant
divergence betweeninvestment and occupier markets. The formermay be
showing initial signs of recovery. Thelatter faces at least two more
years of hardship.Ultimately, the two markets are inextricablylinked,
so improvement in investment marketsmay be derailed by occupational
weakness. |
• The pain in investment markets has beenmanifest in rapid declining transaction volumesand softening yields. Only €13bn was transactedin the pan European shopping centre market in2008, less than half the volume the previousyear. As values have collapsed, prime retail yieldshave moved out by an average of between 150bps and 175 bps over the last year.
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