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| ING REIM sees recovery in European prime property rents The decline in prime yields seen in major European commercial real estate markets this year, in anticipation of a recovery in occupier markets, could be justified by a genuine turnaround in 2011 but significant economic threats remain, ING Real Estate Investment Management said in its latest European View research report. Eugene Philips, Managing Director Research & Investment Strategies at ING REIM Europe said: "Prime rents have stabilized or have begun to recover for the best buildings in select markets and a more widespread recovery is expected in the coming year. This apparently benign picture for prime space, however, masks the still present rent incentives, and also low occupier demand for below-prime properties." Philips added that the initial boost to the European economic recovery from exports, needs to be underpinned by domestic demand to be sustainable, but in this respect the outlook is modest as consumers are not yet ready to open their wallets as they are confronted by major uncertainties surrounding future household income. Overall, the outlook is brighter for real estate markets in France, Germany, the Netherlands and northern Europe than for markets in Southern Europe. European retail has proved to be a resilient property sector in the crisis helped by the consistent income return provided by a diverse tenant base. Retailers are very cost conscious and stores are still being closed. At the same time, retailers are looking for prime locations coming on the market to boost their market share and raise their profile and market power. ING REIM said that market conditions in prime retail locations are now coming into balance, although there is a clear divergence with secondary markets where the outlook is far more uncertain. The research report's top European retail market picks for the 2010-2012 period are outlined in the table below on a risk-adjusted basis, according to ING REIM's proprietary risk model, and also on an absolute return basis. write your comments about the article :: © 2010 Construction News :: home page |