Yields in Moscow fall across the board in Q2: CBRE

Moscow saw the biggest decline in yields across all real estate sectors in the second quarter of 2011, according to new research released by CB Richard Ellis (CBRE). Elsewhere in Europe, prime rents and yields saw little movement, with the pace of recovery generally remaining slow, CBRE said.

Office yields in Moscow were down 150 basis points at 9% in Q2 amid a slight fall across Europe as a whole. Retail yields also fell marginally, with Moscow seeing the largest yield shift of 150 basis points to 10.5%.

CBRE’s findings show that industrial yields displayed the largest quarterly decrease of all commercial property sectors. Again the largest yield reduction was in Moscow (down 200 basis points to 11.5%).

Prime rents saw little change overall across Europe in Q2. Retail rents rose by an average of 1.7%, mainly on the back of increases in Germany and France. Office rents were stable, although a number of key markets rose, including Moscow Stockholm and Amsterdam. The largest increase in Europe occurred in Moscow, where rents increased by 10.5% over the quarter to $1050 per m² per annum.

Industrial rents eased very marginally, but the sector also saw the largest quarter-on-quarter yield reduction (22 basis points), reflecting improvement in the main German markets. Office and retail yields each saw declines of five basis points or less.

Richard Holberton, director of EMEA Research at CBRE, said: ‘In overall terms, the second quarter of 2011 represented a further milestone in the process of gradual value recovery in the European commercial property markets. The absence of any strong general movement in either rents or yields last quarter partly reflects the economic uncertainty caused by the deteriorating news on Greece and other peripheral economies.’