Yields for offices, retail and warehousing properties are expected to stabilise in most European markets by the end of 2012, according to new research from property adviser Savills.
Yields for offices, retail and warehousing properties are expected to stabilise in most European markets by the end of 2012, according to new research from property adviser Savills.
Prime office yields have remained stable throughout 2012 in London (3.75%), Stockholm (4.75%), and the key German cities (between 4.25% and 4.8%), with hardening yields in Vienna (5.25%) and Warsaw (6.0%). This, says Savills, is due to continued high competition for top class assets, reflecting investor confidence and positive rental growth expectations.
'Looking ahead to the end of 2012 it is likely that yields will stabilise in the majority of markets, notably those locations perceived as safe havens, while peripheral markets may continue to experience further yield rises,' noted Lydia Brissy, European research director at Savills.
The prime yield average for shopping centres across Europe moved in by 2 bps year-on-year to 6.1% in the second quarter, while the prime yield average for offices and warehousing has continued to soften, by 16 bps (to 5.6%) and 12 bps (to 7.4%) respectively.
In terms of investment volumes, the UK, France, Germany and Sweden markets collectively accounted for around 85% of total transactions in the first half of 2012. The firm predicts overall European investment volumes to reach some EUR 92 bn by the end of the year, down 5% on 2011.
