Prime European rents and yields stable in Q1: CBRE

The first quarter of 2011 was one of general stability in values across the European commercial property market, with prime rents and yields seeing little movement, according to the latest figures released by CB Richard Ellis (CBRE).

While the direction of prime yield movement is still downward, the pace of change is slow, with falls of less than 10 basis points in each of the main commercial sectors, according to CBRE's latest EMEA Rents and Yields Indices. Prime rents edged up marginally in all sectors in Q1, most strongly in the retail market which saw a 1.4% increase. Year-on-year rental growth remains strongest in the office sector, with a rise of 2.3%.

Richard Holberton, Director of EMEA Research at CB Richard Ellis, said: 'The absence of strong movements in either rents or yields this quarter reflects a number of factors that, in combination, are having the effect of delaying a more convincing recovery. Economic momentum remains uneven and, with fiscal strains within the Eurozone continuing to loom large, investor concerns persist about the impact of government austerity measures on the shape of any rental recovery.

'With prime yields having sharpened more significantly in late 2009 and early 2010, some of the capital targeting the prime end of the market may be finding it more difficult to identify value.'