European retail property values are expected to come under significant pressure this year as investors increasingly lose interest in the retail asset class, according to a new research report by agent Catella.
The adviser said it is not expecting a rent increase in the shopping centre segment this year in any of the 19 countries currently being tracked. Also, Catella pointed out that yield indicators are pointing upwards in a vast majority of the markets. The highest yields are currently being achieved in the Baltic States, followed by Glasgow, Manchester and Birmingham.
In terms of transactions, the Nordic countries lost almost a quarter (-24%) of their transaction volume last year, while CEE investment volumes plummeted by 69%.
‘The age of the "big shopping machines" is drawing to a close,’ Catella said. ‘Of course, further differentiations between city centres, conurbations and rural areas are necessary, but these differences are also becoming increasingly blurred.’
‘The retail asset class is under enormous restructuring pressure throughout Europe,’ commented Thomas Beyerle, head of research at Catella Group. ‘Although the current downward trend came with notice at least since the last decade and was only masked by the very good economic situation in recent years, the current pandemic crisis clearly shows the breaking points.’
