Dublin is set to experience the highest retail rental growth in Europe with an average growth rate of between 4% and 6%, according to M&G Real Estate.
Dublin is set to experience the highest retail rental growth in Europe with an average growth rate of between 4% and 6%, according to M&G Real Estate.
Research published by the global real estate fund manager found that retail rents in the Irish capital are still 50% below their record highs. At the same time the country's economic prospects are improving and consumer spending has risen due to a 0.2% fall in consumer prices in December.
M&G Real Estate said that the potential for growth in the Irish capital’s retail sector is now setting the bar for the rest of Europe.
The retail sector in cities such as Amsterdam, Berlin, Paris and Warsaw are expected to see lower average rental growth rates of between 2% and 4%. The retail sector in Lisbon, however, has 'subtanial potential' as its growth forecasts are to Dublin.
South catches up
Southern Europe – particularly where core retail districts are supported by strengthened market fundamentals – is now catching the attention of institutional investors looking for longer-term returns. M&G Real Estate recently announced its acquisition of a 3,745 m2 prime retail asset at the junction of Via Torino and Via Della Palla in central Milan. The area is one of Milan’s prime commercial locations, and home to a mix of national and international retailers.
Richard Gwilliam, head of property research commented: 'Retail industry growth across Europe is positive, demonstrated by the growing European presence of leading high street retailers – Inditex has recently opened flagship stores in Krakow and Milan.
'Low or negative inflation has been fuelling consumer spend and as occupiers are now eager to capitalise, opportunities are becoming more accessible to investors who want to diversify their fund portfolios. Occupier demand is strengthening while the supply of prime pitch space remains limited, meaning rents will now continue to be pushed upwards.'
M&G Real Estate, part of UK insurance group Prudential PLC has over £21 bn (€29 bn) of property assets under management across Europe, North America and the Asia Pacific region.
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