Colliers: prime CEE shopping centre rates stable, investments in EMEA up

colliers emea report

Colliers International research reveals EMEA retail investment volumes were up 94% to €19.1 bln during the first quarter of 2015 compared with Q1 2014, with expectations that total 2015 transactions will surpass the previous year’s total of €51.8bn.

Prime shopping centre rates stabilized in Central and Eastern Europe, with the exception of Moscow, St Petersburg, Kiev and Zagreb. Small prime retail rental growth was witnessed in Bratislava and Warsaw, as well as in Baltic cities: Tallinn and Vilnius. In Bratislava and Warsaw and the Baltic capitals prime rental growth is expected throughout high streets and shopping centres in 2015.

Colliers International is a partner of Shopping Center Forum Fall Edition, the biggest meeting point for the shopping center industry in Central Eastern Europe.

Retail Investment Market Leaders

In 2014, the retail investment market recorded its strongest year since 2007, with the UK leading the region accounting for more than 30% of the volume. Retail investment in Britain was €16.9bn (up 19%), followed by Germany €8.3 (up 5%), France €5.8 (up 84%), Spain €4.3 (up 179%) and The Nordics €3.9 (down 15%).

Bruno Berretta, Colliers International EMEA Head of Research, explained, “Last year retail investment showed a comeback to almost pre-recession levels but given the strength of the market during the first quarter of this year, with transactions already 37% of the 2014 total, then we can expect an even better performance in 2015. We also expect core Western European markets to continue to be top of the list for investors but as these heat up, more peripheral markets such will see increased activity.”

“We expect that Mario Draghi’s €1.1trillion quantitative easing programme, which is showing more liquidity throughout Europe, as well as further growth in consumer spending and retail sales, will contribute to continued high retail investment volumes.”

Retail trade volume increased by 1.9% in the EU and 1.3% in the Eurozone during 2014.

London: European leader

In terms of retail rental growth, Dubai outperformed London thanks to limited supply and high retailer demand with high street rents jumping 38.8% and shopping centre rents up 22.7%. London high streets saw rent increases of 25% and six per cent in shopping centres.

Strong upward pressure on prime rental levels in London’s high streets is unsurprising given that in 2014 the industry witnessed the sharpest fall in vacancy rates in Central London since 2007.

Paul Souber, Head of Central London Retail Agency, commented, “London high streets lead the field for prime Zone A rents in Europe with Bond Street reaching a record £1,500psf, a 25% annual increase. In additional, rent rise were also witnessed throughout other key London shopping streets including Dover Street, Mount Street and designer destination, Sloane Street. Further rental growth is also expected in prime Glasgow, Bristol and Edinburgh high streets.”

Key outlet openings within Central London throughout the past six months include: J. Crew along Marylebone High Street; Stefanel, Hunter and Michael Kors along Regent Street, David Mayer, Lindex and American Eagle at Westfield, DSquared2 along Conduit Street; and Shinola along Newburgh Street.

Colliers International

Colliers International Group Inc. is a global leader in commercial real estate services with more than 16,300 professionals operating from 502 offices in 67 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 10 consecutive years, more than any other real estate services firm.

Colliers International has been active in the Polish market since 1997 and operates through offices in Warsaw, Kraków, Wrocław, Poznań, Gdańsk Katowice and Łódź with over 200 employees in total. The company has been often honored for its achievements by industry organizations such as Eurobuild, CIJ Journal, CEE Quality Awards and the International Property Awards. Colliers’ most recent distinction in Poland include the “Outsourcing Star”, given in recognition of its status as one of the most active real estate advisors in the outsourcing sector; and the “Gazele Biznesu” for being one of the most dynamically developing companies in Poland. More about us on www.colliers.pl