Eastern Europe leads retail growth: Savills

Poland, Hungary and Czech Republic will see the largest retail growth over the next five years, according to international real estate advisor Savills, but the UK's prospects are the best amongst the five biggest markets.

Poland leads in first place across all areas in terms of average annual growth forecasts between 2009 and 2014 for GDP (+3.9%), disposable income (+3.5 %), consumer spending (3.7%) and retail sales (+4.4%). However, Germany, France and Italy retain a leading position amongst the five biggest European markets in terms of market size, despite having lower growth prospects.

Lydia Brissy, associate director of European research at Savills, commented: 'Germany, France and Italy have posted very stable consumer spending over the past 20 years compared to other European countries, most notably during the economic turmoil. Consequently rental growth is also stable at 0% for prime shopping centres in Berlin, Paris and Milan compared to -4.5% across Europe. Due to the large market size and very low volatility, Germany, France and Italy are thought to be a very safe option for investors.'

Although the UK is relatively volatile, it ranks sixth out of the 16 countries surveyed* as growth prospects are predicted to be very good and it is expected to remain as the biggest potential retail market in 2014.

Spain has proved to be less stable (-4.9% in 2009) and rents have also shown signs of significant fluctuation. However, the country is expected to retain its position as the fifth biggest European retail market.

The Netherlands, Sweden and Norway are relatively large markets but although retail rents are stable, consumer spending and retail sales are quite volatile.