London continues to lead the cycle in Europe with prime City rents forecast to rise in 2010, on the back of tight supply, while across Europe rents are stable or falling. This follows a further fall of 17% by year end 2009, according to DTZ's latest forecast for
London continues to lead the cycle in Europe with prime City rents forecast to rise in 2010, on the back of tight supply, while across Europe rents are stable or falling. This follows a further fall of 17% by year end 2009, according to DTZ's latest forecast for
European property markets.
DTZ’s forecasts highlight the scale of the fall in rental values across Europe in 2009, with an average fall of -13.4% expected by year end, slightly worse than the forecast of -11.9% that was predicted in May. By contrast, market yields have stabilised ahead of expectation.
The global broker says this reflects improving sentiment as risk aversion in the investment market subsides and demonstrates investors' desire to take advantage of historically low prices for prime property. DTZ believes that given the scale of the falls in prices for prime property, several markets - including London, Paris, Berlin and Brussels - now represent fair value for long term investors.
Rents have fallen heavily across the board during 2009, as Tony McGough, global head of Forecasting at DTZ, states: 'We have forecast particularly severe declines for London City offices and Paris CBD offices (-17% and -23% respectively), which have led the pricing correction, along with office markets in Spain (Barcelona and Madrid forecast to fall by -23% and -24% respectively), Ireland (Dublin forecast to fall by -35%) and Central and Eastern Europe where the downturn in occupier markets has been especially sharp.'
