European Retail Marketbeat Snapshots Q1 2012 - SPG Intercity
European Retail Marketbeat Snapshots Q1 2012 - SPG Intercity
European Retail Marketbeat Snapshots Q1 2012 - SPG Intercity
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MARKETBEAT<br />
RETAIL SNAPSHOTS<br />
PAN-EUROPEAN<br />
A Cushman & Wakefield Research Publication<br />
1. Austria<br />
2. Belgium<br />
3. Bulgaria<br />
4. Czech Republic<br />
5. Denmark<br />
6. Finland<br />
7. France<br />
8. Germany<br />
9. Greece<br />
10. Hungary<br />
11. Ireland<br />
12. Italy<br />
13. The Netherlands<br />
14. Norway<br />
15. Poland<br />
16. Portugal<br />
17. Romania<br />
18. Russia<br />
19. Serbia<br />
20. Slovakia<br />
21. Spain<br />
22. Sweden<br />
23. Switzerland<br />
24. Turkey<br />
25. United Kingdom<br />
<strong>Q1</strong> <strong>2012</strong>
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
AUSTRIA<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to the Austrian Institute of<br />
Economic Research (WIFO), retail sales<br />
volume (excluding motor vehicles and<br />
motorcycles) fell 1.9% year-on-year in<br />
December and 0.9% in November. Sales of<br />
automotive fuel, textiles, clothing and footwear continued to<br />
register declines, albeit at a slower pace when compared with the<br />
previous quarter.<br />
OCCUPIER FOCUS<br />
The addition of new and refurbished properties in central<br />
locations has intensified the pressure on outdated shopping<br />
centres, peripheral streets and retail parks. The latter market is<br />
particularly saturated by such properties, with landlord now<br />
eager to modernise. There is currently active demand for train<br />
station projects, with the space in Bahnhofcity now fully leased<br />
and the prospects for Bahnhof Wien Mitte equally positive.<br />
While in general prime rents remained stable over the quarter,<br />
there were pockets of marginal growth and lower vacancy rates<br />
in selected prime locations. Demand continues to outstrip supply,<br />
although retailers remain selective when making decisions.<br />
Subleases in high streets are also a new trend emerging in Vienna,<br />
while premiums paid by retailers remain elevated.<br />
INVESTMENT FOCUS<br />
There is a distinct shortage of assets which meet investor<br />
requirements. Furthermore, liquidity in the investment market<br />
has been adversely affected by the reduction in the number of<br />
new projects as a result of the global economic crisis. Shopping<br />
centre and retail warehouse yields hover above the 6% mark, and<br />
whether they will fall below this figure will become clear once the<br />
big centres currently in development come onto the market. The<br />
forecast economic downturn has for the moment not affected<br />
demand for shopping centres; however, investors are increasingly<br />
risk-aware, focusing on optimising their portfolio rather than<br />
expanding.<br />
OUTLOOK<br />
The economic outlook for <strong>2012</strong> is anticipated to be more<br />
subdued, with GDP growth expected to slow on the 3.1% rate<br />
recorded in 2011, accompanied by sluggish consumer spending.<br />
Taxes increased on the 1 st of April, while the tax-free period for<br />
real estate transactions (previously 10 years) has now been<br />
phased out. This change means that after 10 years owners will be<br />
required to pay capital gains tax.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime rents are expected to hold steady, with<br />
potential growth in selected locations.<br />
Prime Yields: The limited supply of new prime space may<br />
apply some downward pressure on yields.<br />
Supply: Supply was boosted by the recent addition of<br />
new retail schemes.<br />
Demand: Demand remains active for prime locations,<br />
but dissipates in secondary pitches.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Vienna (Kärntnerstrasse) 275 3,300 408 10.1 0.0<br />
Vienna (Mariahilferstrasse) 135 1,620 200 6.2 0.0<br />
Graz 105 1,260 156 5.6 0.0<br />
Linz 115 1,380 171 12.1 0.0<br />
Salzburg 120 1,440 178 9.3 0.0<br />
Innsbruck 100 1,200 148 17.3 5.3<br />
RETAIL PARKS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Vienna 11.50 138 17.1 2.8 0.0<br />
Graz (West) 10.00 120 14.8 2.1 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Vienna (Kärntnerstrasse) 4.25 4.25 4.50 5.20 4.25<br />
Vienna (Mariahilferstrasse) 4.75 4.75 5.00 6.00 4.75<br />
Graz 5.00 5.00 5.00 6.00 5.00<br />
Linz 5.00 5.00 5.50 6.00 5.00<br />
Salzburg 5.00 5.00 5.00 5.60 4.50<br />
Innsbruck 5.25 5.25 5.50 5.80 5.00<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Vienna 6.25 6.25 6.25 7.50 5.00<br />
Graz (West) 6.50 6.50 6.50 8.30 5.50<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Austria 6.10 6.10 6.10 7.00 5.80<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
BELGIUM<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Household consumption in the country<br />
slowed in 2011 and declined over the first<br />
months of <strong>2012</strong>. However, despite falling<br />
to its lowest value in almost three years in<br />
February, the consumer confidence index<br />
rose sharply in March as the slightly more upbeat economic<br />
forecasts filtered through. Nevertheless, the index remains below<br />
the threshold mark of zero, suggesting an overall pessimistic<br />
outlook.<br />
OCCUPIER FOCUS<br />
Notwithstanding subdued consumer sentiment and lower retail<br />
turnover, interest for good locations remains active, albeit more<br />
constrained when compared with previous years. While demand<br />
is generally decelerating and decisions take more time, it remains<br />
relatively healthy. Prime rents were largely stable over the<br />
quarter, with rental growth only limited to annual comparisons in<br />
the retail warehouse sub-sector, where retail parks witnessed<br />
good growth and stand alone units experienced a more mixed<br />
picture.<br />
Nivelles Shopping opened its 12,500 sq.m extension successfully<br />
at the end of March, but overall there are a handful of new<br />
projects entering the pipeline, with the political debate on large<br />
proposed shopping centre projects currently ongoing. The final<br />
decisions on the permits for Uplace and Just Under the Sky are<br />
nevertheless expected in the coming months.<br />
INVESTMENT FOCUS<br />
While slower than the previous quarter, activity in the<br />
investment market remained strong in the first quarter. There<br />
was a total of €272 mn worth of retail assets traded, in contrast<br />
to the revised figure of €329 observed over the previous three<br />
months. In particular, there were a number of notable shopping<br />
centre transactions, namely: the purchase of a part of Westland<br />
shopping centre by AG Real Estate for approximately €81 million<br />
and the acquisition of Galeries de la Toison d’Or by Prudential<br />
for €62 million. Active interest exerted downward pressure on<br />
prime yields, which hardened by 25 bps for high street units and<br />
between 15-35 bps for shopping centres.<br />
OUTLOOK<br />
Economic conditions in the country will be challenging in <strong>2012</strong><br />
with Consensus forecasts suggesting stagnation. At the same<br />
time, however, inflationary pressures and unemployment are<br />
expected to ease, leading to increased economic activity in 2013.<br />
Furthermore, the retail property market will fare relatively well<br />
in <strong>2012</strong>, with the occupier market anticipated to remain stable<br />
and investment activity expected to improve on last year.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable, but may come under pressure if<br />
demand slows down further.<br />
Prime Yields: Prime yields have sharpened and are now<br />
expected to remain stable.<br />
Supply: No new major projects in the pipeline.<br />
Demand: Demand likely to stay unchanged.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Brussels 1,800 223 2.6 0.0<br />
Antwerp 1,800 223 3.7 0.0<br />
Liege 1,100 136 2.4 0.0<br />
Ghent 1,550 192 4.4 0.0<br />
Bruges 1,200 148 2.7 0.0<br />
Hasselt 1,100 136 3.0 0.0<br />
STAND ALONE RETAIL WAREHOUSING<br />
€ US$ GROWTH % CAGR<br />
UNITS<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Brussels 175 21.7 0.6 2.9<br />
Antwerp 150 18.6 -0.7 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Brussels 4.75 5.00 5.00 6.00 4.25<br />
Antwerp 4.75 5.00 5.00 6.00 4.25<br />
Liege 5.50 5.75 5.75 7.00 5.00<br />
Ghent 5.00 5.25 5.25 6.50 4.75<br />
Bruges 5.00 5.25 5.25 6.50 4.75<br />
Hasselt 5.25 5.50 5.50 6.75 5.00<br />
STAND ALONE RETAIL WAREHOUSING CURRENT LAST LAST 10 YEAR<br />
UNITS (FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Brussels 6.25 6.25 6.25 7.75 5.60<br />
Antwerp 6.25 6.25 6.25 7.75 5.60<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Belgium 5.35 5.50 5.50 6.25 4.50<br />
NOTE: Volumes below €5 million may result in sharper yields .<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
BULGARIA<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to preliminary data from the<br />
National Statistical Institute, GDP increased<br />
by 1.6% year-on-year in the fourth quarter<br />
of 2011 and by 1.7% over the year as a<br />
whole. <strong>Retail</strong> sales have continued to<br />
decline: sales volumes (working day adjusted, excluding motor<br />
vehicles, motorcycles and fuel) decreased by 5.3% year-on-year in<br />
February, 1.9% in January and 2.9% in December. The textiles,<br />
clothing, footwear and leather goods segment recorded a<br />
particularly steep decline, with sales falling 25.7% year-on-year in<br />
February.<br />
OCCUPIER FOCUS<br />
Despite challenging trading conditions, several major international<br />
players continue to expand, albeit cautiously. Demand is highly<br />
selective, with retailers considering only prime locations with an<br />
attractive tenant mix and favourable lease terms. On the other<br />
hand, secondary locations are experiencing falling demand, with a<br />
number of smaller, domestic retailers closing unprofitable stores.<br />
Although interest is focused primarily on Sofia, it has recently<br />
been reported that the Galleria Burgas shopping centre, due to<br />
open in May, is more than 80% let.<br />
Shopping centre rents in the capital were stable over the quarter,<br />
with high street rents came under slight downward pressure.<br />
Rents in Burgas also decreased slightly due to competition from<br />
Galeria Burgas. Supply in Sofia is expected to increase this year<br />
with the opening of Paradise Center (80,000 sq.m GLA) and<br />
Bulgaria Mall (33,000 sq.m), which could potentially impact on<br />
rents.<br />
INVESTMENT FOCUS<br />
Prime yields were unchanged across all sub-sectors, on both a<br />
quarterly and an annual basis. Big-box schemes continue to<br />
attract a relatively healthy level of interest, as they are seen as a<br />
stable investment in challenging economic conditions. Indeed, the<br />
only retail transaction recorded over the quarter was the<br />
acquisition of a BauMax unit in Pleven by Bluehouse Capital.<br />
OUTLOOK<br />
A significant improvement in consumer spending is unlikely in the<br />
coming months, and most retailers expect a challenging year<br />
ahead. Occupier demand will remain subdued and selective, and<br />
will be largely driven by food and discount retailers and selected<br />
international fashion brands. Supply outstrips demand, and rents<br />
may come under downward pressure in the coming months as<br />
new shopping centres come onto the market.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable in the most sought-after locations; falls<br />
possible elsewhere.<br />
Prime Yields: Expected to remain stable.<br />
Supply: Will increase, with several shopping centres in<br />
the pipeline.<br />
Demand: Subdued and selective, largely focused on the<br />
capital.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Sofia (Vitosha Boulevard) 48.0 576 71.3 -13.7 -4.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Sofia (Vitosha Boulevard) 9.00 9.00 9.00 15.00 6.00<br />
SHOPPING CENTRES<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 6 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Bulgaria 9.00 9.00 9.00 10.50 7.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
12.00%<br />
10.00%<br />
8.00%<br />
6.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
20.0%<br />
10.0%<br />
-10.0%<br />
-20.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
CZECH REPUBLIC<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Following another 0.1% contraction on the<br />
previous quarter, the country officially<br />
entered a technical recession in Q4 2011,<br />
with consumer spending unchanged and<br />
government expenditure continuing to<br />
decline as a result of austerity measures. According to the Czech<br />
Statistical Office, retail sales were subdued in the first two<br />
months of the year as they contracted on an annual basis by a<br />
working day adjusted 0.5% in January and 1.6% in February. The<br />
latest figures were driven in part by robust sales of fuel and nonfood<br />
goods, while simultaneously held back by lower food sales,<br />
which continued to fall on the back of a 4.0% rise in the lower<br />
VAT rate.<br />
OCCUPIER FOCUS<br />
Existing retailers are generally cautious but still expanding –<br />
especially in successful shopping centres – while the Czech retail<br />
market remains attractive to new retailers. Occupier demand is<br />
strong for successful schemes and particularly for high street<br />
units, the prime rents of which rose on the same period last year.<br />
Elsewhere, retail park rents edged up over the quarter, while the<br />
attractiveness of shopping centres in Prague was reflected in<br />
rental growth in select locations across the capital.<br />
The supply of shopping centre space is currently improving,<br />
supported by the addition of new schemes. Indeed, two new<br />
shopping centres opened in the first quarter of <strong>2012</strong>, including<br />
Forum Nova Karolina in Ostrava – now the biggest scheme in the<br />
Moravskoslezsky region – while three other centres are<br />
scheduled to open during <strong>2012</strong>.<br />
INVESTMENT FOCUS<br />
2011 proved a very successful year for the retail investment<br />
market as it registered the highest total trading volumes on<br />
record at €922 million. However, activity in the first quarter of<br />
<strong>2012</strong> came to a virtual standstill with no retail transactions taking<br />
place. The illiquid market translated into prime yields softening<br />
across the sector as prime values edged up 25 bps in the retail<br />
warehouse sub-sector, high streets in Brno and shopping centres<br />
in Prague.<br />
OUTLOOK<br />
Against a backdrop of subdued consumer spending, weak<br />
economic growth and higher inflation, the retail sector is unlikely<br />
to benefit from an uplift in demand. Furthermore, a slowdown in<br />
eurozone growth will do little to aid exports. The occupier and<br />
investor market are expected to remain stable, although the<br />
latter may see a reduction in total trading volumes.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime retail rents to remain stable.<br />
Prime Yields: The yield compression observed last year has<br />
now run its course.<br />
Supply: Some schemes in the pipeline, but limited<br />
financing continues to restrict developers.<br />
Demand: Occupiers remain cautious, but sentiment<br />
gradually improving.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Prague (Wenceslas Square /<br />
Na Příkopě) 175 2,100 260 0.6 6.1<br />
Brno (Svobody Sq.) 70 840 104 0.0 2.4<br />
RETAIL PARKS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Prague 10.15 122 15.1 -1.0 -1.0<br />
Brno 8.40 101 12.5 -0.8 1.8<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Prague (Wenceslas Square /<br />
Na Příkopě) 6.00 6.00 6.25 9.75 5.00<br />
Brno (Svobody Sq.) 7.50 7.25 7.50 12.50 6.50<br />
RETAIL PARKS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Prague 7.75 7.50 7.75 11.50 6.15<br />
Brno 8.25 8.00 8.25 13.00 6.40<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Czech Republic 6.00 5.75 6.15 9.25 5.00<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
9.00%<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
10.0%<br />
-5.0%<br />
-10.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
DENMARK<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
The economy shrank by a marginal 0.1% in<br />
Q4 2011 on the previous three months, an<br />
identical rate to the revised figure observed<br />
in Q3 and enough to record a second<br />
consecutive fall and a technical recession.<br />
According to Statistics Denmark, the negative trend in retail sales<br />
growth was also apparent at the start of <strong>2012</strong>. Indeed, sales in<br />
the first two months of the year proved disappointing as they<br />
declined by 3.3% in January and 0.5% in February year-on-year.<br />
OCCUPIER FOCUS<br />
Occupier demand for the prime area of Copenhagen and prime<br />
regional shopping centres remains strong, while interest for nonregional<br />
shopping centres continues to decline. Overall, the<br />
occupier market is still marred by low consumer sentiment and<br />
turnover, allowing only the strongest retailers to actively look for<br />
prime space.<br />
Despite this cautious retail environment, several foreign brands<br />
are still interested in opening flagship stores in the capital, eager<br />
to take advantage of what can now be described as very much a<br />
tenants’ market. Prime rents across the country remained<br />
unchanged over the quarter, although there were some high<br />
street adjustments on an annual basis.<br />
INVESTMENT FOCUS<br />
Following the strongest year on record in terms of trading<br />
volumes, which saw €1 billion worth of assets traded, the retail<br />
investment market slowed sharply in the first quarter of <strong>2012</strong> as<br />
only €14 million was spent on acquisitions. The only transaction<br />
of the quarter was the purchase of a high street unit in<br />
Fiolstraede in Copenhagen by Jeudan A/S. Prime yields remained<br />
stable, with the lowest value of 5.00% found on the premier high<br />
street of the capital.<br />
OUTLOOK<br />
Looking ahead, there are some potentially encouraging signs for<br />
the retail sector. As exports are anticipated to decline on the<br />
back of subdued global demand, consumer spending is expected<br />
to grow modestly in <strong>2012</strong> and take up some of the slack, aided by<br />
a gradually lower inflation rate and stable unemployment.<br />
Nevertheless, occupier and investment activity remain generally<br />
subdued, and this trend is not expected to change in the short<br />
term.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: To remain largely unchanged<br />
Prime Yields: Yield stabilisation anticipated in prime<br />
locations.<br />
Supply: Subdued development, with only one new<br />
shopping scheduled to open in <strong>2012</strong>.<br />
Demand: Demand expected to remain stable.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS Dkr € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Copenhagen 17,000 2,285 283 1.2 6.3<br />
Aarhus 4,750 638 79 -1.0 0.0<br />
Odense 3,600 484 60 -2.1 -2.7<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Copenhagen 5.00 5.00 4.50 6.00 3.00<br />
Aarhus 5.25 5.25 5.00 6.50 4.25<br />
Odense 5.75 5.75 5.50 7.50 4.50<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Denmark 6.00 6.00 6.00 6.00 4.25<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
3.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
10.0%<br />
-5.0%<br />
-10.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
FINLAND<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to preliminary data from<br />
Statistics Finland, GDP grew by 1.4% yearon-year<br />
in the fourth quarter of 2011 and<br />
by 2.9% over the year as a whole,<br />
accompanied by a 1.4% increase in<br />
households’ real incomes. The consumer confidence indicator<br />
increased sharply in February and held firm in March after a year<br />
of decline, although the indicator is below both the long-term<br />
average and the level recorded in March 2011. <strong>Retail</strong> sales<br />
volumes (excluding motor vehicles and motorcycles) grew 5.4%<br />
in February, 3.6% in January and 1.2% in December; sales have<br />
been on an upward trajectory since early 2010.<br />
OCCUPIER FOCUS<br />
Demand for high-quality retail space remains strong, with interest<br />
focused on Helsinki CBD. However, occupier activity in the<br />
capital is constrained by very low availability on the high streets,<br />
although supply in central Helsinki is expected to improve slightly<br />
later this year with the completion of the mixed-use City-Center<br />
project.<br />
Across Finland, there is more than 200,000 sq.m of new shopping<br />
centre space scheduled for completion in <strong>2012</strong>/13, most of it in<br />
the South of Finland, although provision is also expected to<br />
improve in cities including Kuopio and Oulu. The extension and<br />
refurbishment of the Itis shopping centre on the outskirts of<br />
Helsinki (formerly known as Itäkeskus) has recently started<br />
construction and is scheduled for completion in 2014. It has been<br />
reported that the owner, Wereldhave Finland, is involved in<br />
negotiations with several international retailers seeking to enter<br />
Finland.<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> investment volume totalled €103 mn in the first quarter,<br />
compared with €143 mn in the previous quarter and €53 mn in<br />
<strong>Q1</strong> 2011. High street and shopping centre yields held firm over<br />
the quarter, with the exception of high street yields in Turku,<br />
which moved in by 25 bps; retail warehouse yields moved out by<br />
25-50 bps. While there is a high level of interest for core<br />
properties, activity is constrained by a lack of supply.<br />
OUTLOOK<br />
Whilst economic growth is expected to slow in <strong>2012</strong>, sales and<br />
demand for prime space should remain healthy, with interest<br />
focused on Helsinki CBD. Prime rents in the capital are<br />
supported by limited availability, and the new shopping centres<br />
coming onto the market in and around Helsinki should be<br />
absorbed quickly.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Generally stable, although growth is possible<br />
on the top high streets.<br />
Prime Yields: Should remain stable.<br />
Supply: Slight increase in Helsinki; elsewhere, several<br />
shopping centres in the pipeline for <strong>2012</strong>/13<br />
Demand: Demand for prime high street and shopping<br />
centre space will remain healthy, but selective.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Helsinki 160 1,920 238 5.1 0.0<br />
Turku 60 720 89 -3.0 0.0<br />
Tampere 82 984 122 1.8 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Helsinki 5.00 5.00 5.00 6.50 5.00<br />
Turku 6.00 6.25 6.25 8.75 6.00<br />
Tampere 6.25 6.25 6.25 8.75 6.20<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 7 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Finland 5.00 5.00 5.00 6.25 4.30<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
15.0%<br />
10.0%<br />
5.0%<br />
0.0%<br />
-5.0%<br />
-10.0%<br />
-15.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
FRANCE<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to the National Institute of<br />
Statistics GDP grew by 1.7% in 2011, with<br />
Q4 providing 0.2% growth. The<br />
unemployment rate rose slightly in Q4 to<br />
9.4% up from 9.3% the previous quarter.<br />
An increase in wages recorded in Q4 was mirrored by a similar<br />
rise in consumption prices keeping purchasing power relatively<br />
flat with a household disposable income (after inflation) recorded<br />
at just +0.1%.<br />
OCCUPIER FOCUS<br />
Demand remains strong for prime retail locations in Paris and<br />
other major urban areas, underpinned by strong tourist numbers<br />
providing a buoyant retail market - particularly for luxury<br />
retailers. In addition there have been a number of international<br />
and <strong>European</strong> newcomers to the market and recently established<br />
retailers have continued to expand. Prime high street remains<br />
the most competitive market, with short supply and high demand<br />
from luxury and international retailers contributing to a sharp<br />
upward pressure on rents. This demand is not replicated in<br />
medium sized shopping centres, where supply remains high.<br />
Prime retail parks have continued to be resilient providing some<br />
retailers with cheaper occupancy costs in locations that match<br />
their strategy.<br />
Prime high street rents in Paris have risen an average of 18%<br />
year-on-year with a 10% rise recorded in prime high streets in<br />
other major urban centres. <strong>Retail</strong> warehousing rents have been<br />
largely stable with few exceptions. Prime shopping centre rents<br />
remained stable.<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> investment reached the highest levels since Q3 2007 in Q4<br />
2011 (€1.7 bn), however the investment market has now<br />
returned to a much more subdued level with just €189 mn<br />
invested in <strong>Q1</strong> <strong>2012</strong>, down 66% on <strong>Q1</strong> 2011. Investor appetite<br />
for retail high street locations and prime shopping centres retail<br />
has not waned but limited prime opportunities has kept<br />
investment volumes low.<br />
OUTLOOK<br />
Overall the climate is sluggish with unemployment levels not<br />
improving and uncertainty surrounding the outcome of the<br />
upcoming elections. It is unlikely that the investment market will<br />
perform as strongly as it did in 2011, with certain fiscal<br />
advantages that stimulated the market at the end of 2011 no<br />
longer applying. However, purchase agreement activity suggests<br />
the next quarter will see retail investment volumes rising higher<br />
than those recorded in <strong>Q1</strong>.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime rents are expected to remain stable or<br />
increasing. Growing distinction between prime<br />
and secondary.<br />
Prime Yields: Yields stabilisation anticipated.<br />
Supply: Stable pipeline but AAA supply remains scarce.<br />
Demand: Apart from prime locations demand will wane.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS Zone A € € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Paris 13,000 9,573 1184 6.5 30.0<br />
Lyon 2,200 1,620 200 4.1 10.0<br />
Marseille 2,000 1,473 182 4.6 11.1<br />
Bordeaux 2,200 1,620 200 6.6 10.0<br />
Strasbourg 2,000 1,473 182 n/a 0.0<br />
Lille 2,200 1,620 200 4.1 10.0<br />
Toulouse 2,200 1,620 200 6.6 10.0<br />
Nice 2,200 1,620 200 6.6 10.0<br />
RETAIL PARKS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Paris Region 180 22.3 -1.1 0.0<br />
SHOPPING CENTRES € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Paris Region 2,000 247 2.1 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Paris 4.50 4.50 4.50 6.50 4.00<br />
Lyon 5.25 5.25 5.25 6.75 4.75<br />
Marseille 5.25 5.25 5.50 6.75 4.75<br />
Bordeaux 5.25 5.25 5.50 7.00 4.75<br />
Strasbourg 5.25 5.25 5.50 6.50 5.25<br />
Lille 5.25 5.25 5.50 7.75 4.75<br />
Toulouse 5.75 5.75 5.75 7.75 4.75<br />
Nice 5.75 5.75 5.75 7.00 4.75<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Paris Region 6.00 5.75 6.00 8.25 5.00<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Paris Region 5.00 4.75 4.75 5.75 4.00<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
GERMANY<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to the Federal Statistical Office<br />
(Destatis), growth slowed in Q4 2011, with<br />
GDP expanding by 1.5% y/y. Over the year<br />
as a whole, GDP grew by 3.0%. Consumer<br />
confidence remains relatively strong, with<br />
the willingness to buy indicator at a high level in spite of rising<br />
fuel and energy costs and declining income expectations. <strong>Retail</strong><br />
sales volume (excluding motor vehicles) increased by 2.1% y/y in<br />
February, 1.9% in January and 1.3% in December.<br />
OCCUPIER FOCUS<br />
Several major international retailers are in expansion mode, and<br />
there is considerable interest for prime pitches in the Top Seven<br />
cities (including Cologne and Stuttgart). Rents appear to have<br />
stabilised, remaining unchanged across all sub-sectors over the<br />
quarter after experiencing upward pressure last year. On an<br />
annual basis, prime shopping centre rents have increased by<br />
around 5%, while on the high streets, values have gone up by as<br />
much as 28% in the most sought-after locations.<br />
Recent completions in the shopping centre segment include<br />
Boulevard Berlin, which opened on 4 April with a reported<br />
occupancy rate of nearly 90%. Provision in the capital will be<br />
boosted further in 2013 upon completion of Bikini Berlin and the<br />
mixed-use Leipziger Platz scheme; while in Frankfurt the<br />
completion of Skyline Plaza will improve availability.<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> properties continue to enjoy very strong popularity among<br />
real estate investors. A recent survey conducted by the Hahn<br />
Group shows an increase in risk tolerance relative to 2011: 29%<br />
of respondents favoured value-added properties (compared to<br />
17% last year). Approximately €1.5 bn. of retail assets were<br />
transacted over the quarter, accounting for 27.9% of all<br />
commercial property investment volumes. As product in the<br />
sought-after prime segment remains scarce and only a limited<br />
number of deals were closed in early <strong>2012</strong>, the investment<br />
volume was noticeably lower than in <strong>Q1</strong> 2011 (€3.1 bn).<br />
Nevertheless, the German retail investment figure accounts for<br />
nearly a quarter of the <strong>Q1</strong> <strong>European</strong> total. Prime yields were<br />
stable over the quarter across most of the locations surveyed.<br />
OUTLOOK<br />
Whilst economic growth is expected to slow in <strong>2012</strong>, the<br />
outlook for the retail market is positive. Germany is a popular<br />
expansion target, and occupier demand should remain strong.<br />
While there are a number of projects in the pipeline,<br />
development activity on the whole remains subdued, and limited<br />
availability should support rents going forward.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Generally stable, although moderate growth is<br />
possible on the top high streets.<br />
Prime Yields: Stable, although further compression cannot<br />
be ruled out.<br />
Supply: Limited overall, but should improve slightly in<br />
Berlin and Frankfurt.<br />
Demand: Strong, with a number of major players<br />
planning expansion.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Berlin 280 3,360 416 7.0 27.3<br />
Frankfurt 290 3,480 431 5.2 7.4<br />
Hamburg 290 3,480 431 n/a n/a<br />
Munich 350 4,200 520 6.1 12.9<br />
Dusseldorf 260 3,120 386 5.4 13.0<br />
Stuttgart 260 3,120 386 4.4 15.6<br />
Cologne 280 3,360 416 6.4 27.3<br />
Leipzig 130 1,560 193 2.5 13.0<br />
Dresden 115 1,380 171 2.8 27.8<br />
RETAIL PARKS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Frankfurt 15.00 180 22.3 1.4 1.7<br />
Munich 16.00 192 23.8 1.3 1.6<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Berlin 4.70 4.70 4.70 5.25 4.60<br />
Frankfurt 4.50 4.50 4.50 5.00 4.45<br />
Hamburg 4.40 4.40 n/a 4.40 4.40<br />
Munich 4.10 4.10 4.10 5.00 3.85<br />
Dusseldorf 4.45 4.45 4.55 5.00 4.45<br />
Stuttgart 4.75 4.75 4.75 5.00 4.60<br />
Cologne 4.45 4.45 4.50 5.00 4.40<br />
Leipzig 5.60 5.60 5.65 6.50 5.25<br />
Dresden 6.10 6.00 6.30 6.50 5.50<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Frankfurt 6.40 6.40 6.65 7.60 6.25<br />
Munich 6.40 6.40 6.65 7.60 6.25<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Germany 4.80 4.80 5.00 5.75 4.80<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
GREECE<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to provisional data from the<br />
Greek statistical service, GDP fell by 7.5%<br />
year-on-year in the fourth quarter of 2011.<br />
Over the year as a whole, the economy<br />
contracted by 6.8%, with unemployment<br />
climbing to 20.7%. <strong>Retail</strong> sales volume (excluding automotive fuel)<br />
decreased by 10.2% year-on-year in January, 10.0% in December<br />
and 6.6% in November. A particularly sharp contraction was<br />
recorded in the clothing and footwear segment, with sales<br />
declining by 19.9% year-on-year in January, while food, beverages<br />
and tobacco recorded a fall of 18.1%.<br />
OCCUPIER FOCUS<br />
With footfall and turnover in decline, activity has continued to<br />
slow. Numerous store closures have been reported on the<br />
country’s high streets, with vacancy increasing even in the most<br />
traditionally sought-after areas. In March, the National<br />
Confederation of Hellenic Commerce (ESEE) estimated vacancy<br />
in central Athens at around 29.6%, up from 23.4% in March 2011.<br />
Demand is driven by cafes and food operators, with the majority<br />
of occupiers focused on renegotiating their leases. Development<br />
activity has come to a standstill, with no projects scheduled for<br />
completion in <strong>2012</strong> or 2013.<br />
Rents came under pressure over the quarter across all subsectors,<br />
declining by 4-6% on all of the high streets surveyed, and<br />
6-7% in prime shopping centres in Athens and Thessaloniki. On<br />
an annual basis, most prime high street rents have decreased by<br />
around 10%, falling by nearly 18% in Kifisia submarket. Shopping<br />
centre rents have fared better due to limited provision, holding<br />
firm throughout 2011.<br />
INVESTMENT FOCUS<br />
The uncertain economic climate, limited availability of financing<br />
and an ever-changing tax environment continue to deter<br />
investors, and activity remains subdued. <strong>Retail</strong> transaction<br />
volumes are estimated to total approximately €2 mn in the first<br />
quarter, compared with €10 mn in both the previous quarter and<br />
<strong>Q1</strong> 2011. Prime high street yields moved out by 25 bps over the<br />
quarter, while shopping centre and retail park yields moved out<br />
by 10 bps.<br />
OUTLOOK<br />
The economy is expected to contract further in <strong>2012</strong>, and sales<br />
are likely to suffer against a backdrop of austerity and rising<br />
unemployment. Occupier and investor demand will be subdued<br />
for the foreseeable future and rents will come under further<br />
downward pressure.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Further falls expected as supply continues to<br />
outstrip demand.<br />
Prime Yields: Coming under further upward pressure over<br />
the coming months.<br />
Supply: No new projects in the pipeline, but vacancy<br />
increasing even in prime locations.<br />
Demand: <strong>Retail</strong>ers extremely cautious, with very few<br />
planning to expand.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Athens (Kolonaki-Tsakalof) 105 1,260 156 -10.2 -8.7<br />
Athens (Ermou) 170 2,040 252 -8.5 -12.8<br />
Athens (Glyfada-Metaxa) 110 1,320 163 -9.4 -8.3<br />
Athens (Kifisia-Kolokotroni) 110 1,320 163 -9.4 -8.3<br />
Athens (Piraeus-Sotiros) 62 744 92 -9.1 -11.4<br />
Thessaloniki (Tsimiski) 115 1,380 171 -0.8 -11.5<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Athens (Kolonaki-Tsakalof) 7.85 7.60 7.35 7.85 5.50<br />
Athens (Ermou) 7.75 7.50 7.45 7.75 5.00<br />
Athens (Glyfada-Metaxa)*<br />
Athens (Kifisia-<br />
8.15 7.90 7.40 8.15 5.50<br />
Kolokotroni)* 8.15 7.90 7.40 8.15 5.50<br />
Athens (Piraeus-Sotiros)* 8.25 8.00 7.80 8.25 6.00<br />
Thessaloniki (Tsimiski) 8.25 8.00 7.40 8.25 5.75<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Greece 7.85 7.75 7.50 8.00 6.00<br />
NOTE: * 6 year record<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
9.00%<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
15.0%<br />
10.0%<br />
5.0%<br />
0.0%<br />
-5.0%<br />
-10.0%<br />
-15.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
HUNGARY<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to preliminary estimates from<br />
the Central Statistical Office, GDP<br />
increased by 1.4% year-on-year in the<br />
fourth quarter of 2011 and by 1.7% over<br />
the year as a whole. The GKI-Erste<br />
consumer confidence indicator increased in February and March<br />
after declining throughout 2011, although confidence remains low<br />
against a backdrop of austerity and economic uncertainty. <strong>Retail</strong><br />
sales volume grew 0.6% year-on-year in January, 1.6% in<br />
December and 1.1% in November.<br />
OCCUPIER FOCUS<br />
Sales were stagnant throughout 2011, stabilising after several<br />
years of decline, and the majority of occupiers remain cautious.<br />
However, several major international players are in expansion<br />
mode, taking advantage of attractive commercial terms to open<br />
stores, with a handful of new entries reported in recent months.<br />
Rents came under downward pressure in selected shopping<br />
centres in Budapest, partly due to competition from KÖKI<br />
Terminal, which opened last October. Elsewhere, rents were<br />
unchanged.<br />
Development activity has come to a virtual standstill: while there<br />
are several shopping centres at the development stage,<br />
completion dates are uncertain. On 1 January, a ban on<br />
constructing commercial facilities larger than 300 sq.m came into<br />
force; the “plaza stop” legislation will be in place until 31<br />
December 2014. However, exemptions have been granted to<br />
several schemes, all of them under 5,000 sq.m.<br />
INVESTMENT FOCUS<br />
The scarce availability of debt and investment-grade product<br />
remains a barrier for investors, and no retail transactions were<br />
recorded in the first quarter. Prime yields held firm across all<br />
sub-sectors.<br />
OUTLOOK<br />
The economy is expected to enter into recession this year, and a<br />
rebound in consumer spending is unlikely in the foreseeable<br />
future. However, the top high streets of Budapest will continue<br />
to attract interest from global brands. As a consequence of the<br />
“plaza stop” legislation, no new shopping centres are scheduled<br />
for completion in 2013/14, and existing vacant space in prime<br />
locations should gradually be absorbed as selected retailers<br />
continue to expand. The focus of development activity will shift<br />
towards the refurbishment of existing schemes, as established<br />
centres modernise in order to maintain their competitiveness and<br />
accommodate newcomers.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable, supported by relatively healthy (albeit<br />
selective) demand.<br />
Prime Yields: Expected to hold firm.<br />
Supply: Development activity has come to a standstill.<br />
Demand: Several international retailers active in the<br />
market, interest focused on prime locations.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Budapest (Váci utca) 90 1,080 134 -5.6 -10.0<br />
Budapest (Andrássy út) 40 480 59 -7.8 -20.0<br />
RETAIL PARKS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Budapest 8.00 96 11.9 -2.3 0.0<br />
Budaörs 8.00 96 11.9 -2.3 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Budapest (Váci utca) 6.50 6.50 7.00 10.00 5.50<br />
Budapest (Andrássy út) 6.50 6.50 7.25 11.50 6.00<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Budapest 7.75 7.75 8.00 10.75 6.25<br />
Budaörs 7.75 7.75 8.00 10.50 6.00<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Hungary 6.50 6.50 6.75 8.00 5.00<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
9.00%<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
20.0%<br />
10.0%<br />
-10.0%<br />
-20.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
IRELAND<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Following three successive annual falls in<br />
GDP, initial figures from the Central<br />
Statistical Office suggest an expansion in<br />
GDP by 0.7% for the year in 2011.<br />
Consumer confidence remained cautious in<br />
the first quarter of <strong>2012</strong>, as reduced spending and personal debt<br />
consolidation was reflected in a recorded 2.1% decrease in retail<br />
sales volume (excluding motor trades) year-on-year in February.<br />
OCCUPIER FOCUS<br />
Despite the difficult trading conditions, many retailers retain a<br />
positive outlook for prime retail locations, particularly in Dublin<br />
city centre and in strong suburban shopping centres. Flexible<br />
leasing arrangements and attractive rental terms have created an<br />
increased interest from overseas retailers in prime locations.<br />
However, no new lettings were achieved on Grafton Street or<br />
Henry Street in <strong>Q1</strong> <strong>2012</strong>.<br />
Outside of Dublin it is the discount brands that continue to<br />
expand most aggressively. The pharmaceutical sector is also one<br />
to watch, with existing operators seeking to expand and new<br />
<strong>European</strong> market entrants expected.<br />
Prime high street rents continued to come under downward<br />
pressure over the quarter. Dublin fell by almost 7%, whereas<br />
Galway and Limerick both saw falls of 17%. In Cork and<br />
Waterford, the declines were more moderate as values edged<br />
down by 4% and 2.5%, respectively. Prime shopping centre and<br />
retail warehouse rents were unchanged.<br />
INVESTMENT FOCUS<br />
While no retail investment deals were completed in <strong>Q1</strong>, there<br />
were a significant number of new retail investments opportunities<br />
brought to the market during this period. It is anticipated that<br />
this increased choice will provide investors with the potential to<br />
secure income yields that will outperform most other asset<br />
classes. Prime yields in the locations surveyed moved out by 10-<br />
20 bps over the quarter.<br />
OUTLOOK<br />
Although trading conditions remain difficult the latest consumer<br />
sentiment index provided by the Economic and Social Research<br />
Institute (ESRI) is increasing. There is less concern about the<br />
employment market and a perception of better stability within<br />
the eurozone. The increase in enquiries from retailers in recent<br />
months could translate into leasing activity in the remainder of<br />
<strong>2012</strong>, but landlords have to remain flexible with lease structures<br />
to attract retailers.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Further falls expected. Landlords increasingly<br />
flexible.<br />
Prime Yields: Moderate upward pressure is anticipated.<br />
Supply: Decreasing for prime locations. Development<br />
levels subdued.<br />
Demand: Overall demand should remain stable, with<br />
interest focused on prime locations.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS Zone A € € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Dublin (Grafton Street) 5,000 2,810 348 -12.0 -7.4<br />
Dublin (Henry Street) 3,500 1,775 243 -10.2 -12.5<br />
Cork 2,300 1,166 144 -10.9 -11.5<br />
Limerick 500 254 31 -28.1 -37.5<br />
Waterford 780 396 49 -17.2 -8.2<br />
Galway 1,250 634 78 -16.1 -28.6<br />
RETAIL PARKS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Dublin 150 18.6 -14.1 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Dublin (Grafton Street) 6.90 6.85 6.45 6.90 2.85<br />
Dublin (Henry Street) 6.90 6.85 6.45 6.90 2.75<br />
Cork 8.00 7.85 7.65 8.00 3.70<br />
Limerick 8.50 8.15 7.85 8.50 4.00<br />
Waterford 8.50 8.25 7.85 8.50 4.00<br />
Galway 8.15 8.00 7.75 8.15 3.75<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Dublin 8.10 8.00 7.85 8.10 4.25<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Ireland 8.00 8.00 7.65 8.00 4.25<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
ITALY<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
After a significant fall of 3.7% in December,<br />
the retail sales decline recorded in January<br />
<strong>2012</strong> was milder as sales eased back by just<br />
0.8% on the same month last year,<br />
according to the Italian National Institute of<br />
Statistics (ISTAT). The deceleration came on the back of stronger<br />
food sales, which recorded very marginal growth over the<br />
quarter. The difference between large chains and smaller retailers<br />
was marked across all segments, with large operators consistently<br />
outperforming smaller retailers.<br />
OCCUPIER FOCUS<br />
Occupier demand remains focused on prime locations, with the<br />
high street interest centred on key cities, with smaller towns<br />
increasingly under pressure. Tenant demand is particularly<br />
evident in prime locations where supply continues to be limited,<br />
while secondary locations with high availability lag behind. In the<br />
shopping centre market, lease renewals with lower rents have<br />
been evident only in secondary centres. <strong>Retail</strong> parks generally<br />
offer a more efficient cost structure and less sub-sector<br />
competition compared with shopping centres, which however are<br />
able to attract more visitors and potential customers. On the<br />
supply side, new starts on development have slowed considerably<br />
across the sector.<br />
INVESTMENT FOCUS<br />
No significant single asset shopping centre deals have been<br />
registered in <strong>Q1</strong>. International players continue to seek<br />
opportunities to purchase established centres recognising their<br />
defensive qualities and risk diversification. The coming months<br />
may indicate if this asset class will see any material re-pricing due<br />
to the restricted amount of available finance. Based on present<br />
sentiment, rather than market evidence, prime yields for proven<br />
shopping centres have been held steady.<br />
OUTLOOK<br />
The gap between prime and secondary products is expected to<br />
widen further. Economic headwinds are expected to persist, with<br />
GDP forecast to contract and consumer spending significantly<br />
dampened by austerity measures and increased unemployment.<br />
While values for prime retail assets cannot be immune from this<br />
general scenario, they are likely to be one of the most resilient<br />
asset classes.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime values expected to hold.<br />
Prime Yields: Mostly stable in prime locations, but softening<br />
in secondary.<br />
Supply: Limited financing continues to hamper<br />
development, but availability is high in<br />
secondary pitches.<br />
Demand: <strong>Retail</strong>ers to remain cautious.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Milan 7,000 866 3.5 2.9<br />
Rome 6,800 841 4.7 1.5<br />
Bologna 2,200 272 n/a 4.8<br />
Naples 1,900 235 0.0 0.0<br />
Turin 1,700 210 2.5 0.0<br />
RETAIL PARKS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Milan 220 27.2 -3.3 0.0<br />
Rome 200 24.7 -5.1 0.0<br />
SHOPPING CENTRES € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Milan 800 99.0 0.5 0.0<br />
Rome 800 99.0 1.3 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Milan 5.00 5.00 5.00 5.00 4.00<br />
Rome 5.00 5.00 5.00 5.00 4.25<br />
Bologna 5.75 5.75 5.50 6.50 5.00<br />
Naples 6.00 6.00 6.00 7.00 5.25<br />
Turin 5.50 5.50 5.50 6.75 5.00<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Milan 7.00 7.00 7.00 7.00 6.00<br />
Rome 7.00 7.00 7.00 7.00 6.00<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Milan 6.25 6.25 6.25 6.50 5.00<br />
Rome 6.25 6.25 6.25 6.50 5.00<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
THE NETHERLANDS<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to provisional data from the<br />
Central Bureau of Statistics (CBS), retail<br />
sales declined by 1.7% in both February and<br />
January on the same months last year. The<br />
growth rate has now been negative since<br />
May 2011, highlighting ongoing pressures on retailers. The<br />
weakness of the non-food segment remains the catalyst behind<br />
the subdued retail turnovers, with the 4.8% fall in sales<br />
underlined by another sharp decline in the sale of household<br />
equipment, which contracted by 7.7%. On the other hand, shops<br />
selling foods fared much better, with supermarkets recording a<br />
4.0% increase in sales.<br />
OCCUPIER FOCUS<br />
Occupier demand for retail space across the country is waning,<br />
although for prime locations interest has held relatively firm in<br />
the first quarter of <strong>2012</strong>. Secondary locations are under<br />
increasing pressure as sales decline and vacancy increases. Market<br />
activity is currently driven by international retailers focusing on<br />
major cities, while domestic retailer activity is increasingly<br />
subdued. Indeed, one of the key openings of <strong>Q1</strong> was the first<br />
Apple flagship store on the Leidseplein in Amsterdam.<br />
Availability of retail units in prime locations across major cities<br />
remains low, while secondary cities on the other hand are<br />
experiencing an increase in supply in both prime and secondary<br />
pitches. Availability in cities with a non-dominant catchment area<br />
is also generally above the national average, and these locations<br />
are expected to see further increases on the back of limited<br />
occupier activity.<br />
INVESTMENT FOCUS<br />
The investment market was relatively subdued in the first quarter<br />
of <strong>2012</strong>, with just over €145 million worth of assets traded.<br />
However, the slowdown in activity was primarily caused by a<br />
dearth of large transactions. Indeed, the biggest deal recorded<br />
was the €23 million portfolio sale of several high street assets. In<br />
total, there were just six transactions over €10 million in the first<br />
three months of the year. Prime yields remained largely<br />
unchanged over the quarter.<br />
OUTLOOK<br />
Looking ahead, the retail market is expected to see a<br />
performance disparity between major and secondary cities in<br />
<strong>2012</strong>. While the former will remain fairly stable compared with<br />
previous years, the latter cities will see an increasing number of<br />
vacant units. Furthermore, investment activity is expected to<br />
slow, with investors principally interested in prime products with<br />
a dominant catchment and a strong tenant mix.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime rents in major cities are expected to<br />
either hold firm or increase slightly over <strong>2012</strong>.<br />
Prime Yields: Values to remain stable.<br />
Supply: Supply anticipated to increase in secondary<br />
locations, but stay unchanged in prime pitches.<br />
Demand: Strong demand for prime locations; weak<br />
elsewhere.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Amsterdam 2,800 346 8.1 14.3<br />
Rotterdam 1,800 223 3.7 0.0<br />
Den Haag 1,500 186 6.4 0.0<br />
Utrecht 1,600 198 4.2 0.0<br />
Maastricht 1,600 198 2.7 0.0<br />
Eindhoven 1,450 179 3.9 0.0<br />
RETAIL PARKS € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Amsterdam 135 16.7 -1.4 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Amsterdam 4.70 4.70 4.70 5.50 4.00<br />
Rotterdam 5.00 5.00 5.00 5.70 4.75<br />
Den Haag 5.10 5.10 5.10 6.00 4.75<br />
Utrecht 5.10 5.10 5.10 6.00 4.75<br />
Maastricht 5.10 5.10 5.10 5.90 4.75<br />
Eindhoven 5.10 5.10 5.10 6.30 4.75<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Amsterdam 7.60 7.60 7.60 7.75 6.00<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
10.0%<br />
-5.0%<br />
-10.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
NORWAY<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Mainland GDP grew by 2.7% year-on-year<br />
in the fourth quarter of 2011 and by 2.6%<br />
over the year as a whole, accompanied by a<br />
4% increase in households’ real disposable<br />
incomes. <strong>Retail</strong> sales volume (excluding<br />
motor vehicles, motorcycles and automotive fuel) increased by<br />
7.4% year-on-year in February, 6.7% in January and 2.6% in<br />
December.<br />
OCCUPIER FOCUS<br />
Demand has continued to improve, with strong interest from<br />
domestic and international retailers alike. Low vacancy is<br />
reported for prime high streets and shopping centres across the<br />
country, with full occupancy on the top high streets of Oslo.<br />
Prime rents came under upward pressure across all sub-sectors,<br />
rising by around 5% in most of the locations surveyed. On Karl<br />
Johan Gate in Oslo, rents grew 12.5% over the quarter and are<br />
now at record levels. Rents in the Strommen Storsenter and<br />
Aker Brygge shopping centres also increased considerably,<br />
reaching record levels, partly due to major upgrades to both<br />
schemes. Strommen Storsenter is being extended by 35,000 sq.m,<br />
with completion scheduled for October, while the refurbishment<br />
of Aker Brygge is scheduled for completion in 2015.<br />
Per capita shopping centre provision in Norway is the highest in<br />
Europe, with nearly 700 sq.m per 1,000 inhabitants, and in recent<br />
years the focus of development activity has shifted towards the<br />
extension and refurbishment of existing schemes. Indeed,<br />
extensions make up more than 60% of the development pipeline<br />
for <strong>2012</strong>/13. This includes the third and fourth phases of<br />
Sørlandssenteret in Kristiansand S; upon completion,<br />
Sørlandssenteret will be the largest scheme in the country.<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> transaction volume in the first quarter totalled €189 mn, as<br />
compared with €256 mn in the previous quarter and €117 mn in<br />
<strong>Q1</strong> 2011. The acquisition of a portfolio of four shopping centres<br />
by NIAM accounted for most of the total. Yields were stable<br />
over the quarter across all sub-sectors; on an annual basis yields<br />
have moved in by 50 bps.<br />
OUTLOOK<br />
The economy is expected to expand further in <strong>2012</strong>, with low<br />
export growth likely to be offset by increased domestic demand.<br />
The outlook for the retail market is positive, with Statistics<br />
Norway predicting continued growth in household consumption<br />
in <strong>2012</strong>. Demand for new space will remain strong, and the new<br />
supply coming onto the market should be absorbed quickly.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Supported by limited availability; further<br />
growth likely in the top locations.<br />
Prime Yields: Expected to hold firm.<br />
Supply: Several projects under construction;<br />
extensions account for most of the pipeline.<br />
Demand: Strong demand for prime retail space across<br />
the country.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS Nkr € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Oslo (Karl Johan Gate) 18,000 2,370 293 2.4 12.5<br />
Oslo (Bogstadveien Street) 11,500 1,514 187 -2.4 4.5<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Oslo (Karl Johan Gate) 5.25 5.25 5.75 7.80 4.50<br />
Oslo (Bogstadveien Street) 5.50 5.50 6.00 7.80 4.50<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Norway 5.50 5.50 6.00 7.50 5.25<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
10.0%<br />
-5.0%<br />
-10.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
POLAND<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to preliminary estimates from<br />
the Central Statistical Office, GDP grew<br />
4.3% in 2011, with individual consumption<br />
expenditure rising 3.1%. Despite declining<br />
consumer confidence, retail sales have<br />
continued to grow: sales volume increased by 8.9% year-on-year<br />
in February, 9.9% in January and 4.2% in December. Furniture,<br />
radio, TV and household appliances recorded year-on-year<br />
growth of nearly 20% in both January and February.<br />
OCCUPIER FOCUS<br />
Demand for prime retail space remains healthy, with interest<br />
focused mainly on established locations. Activity is driven by large<br />
international and domestic brands: many major players are<br />
actively expanding and several new entrants are expected this<br />
year. Smaller retailers, on the other hand, are far more cautious<br />
and selective in their expansion plans, considering only prime<br />
locations with competitive rents and incentive packages. There is<br />
a healthy shopping centre pipeline in the large regional cities,<br />
which should be absorbed relatively quickly – most of the new<br />
schemes completed in 2011 opened 80-90% let.<br />
Prime high street rents were stable over the quarter, while<br />
shopping centre rents increased by around 5% in most of the<br />
locations surveyed. Secondary shopping centre rents, on the<br />
other hand, are under downward pressure, with landlords<br />
offering favourable lease terms and more generous incentive<br />
packages to attract and retain tenants. <strong>Retail</strong> warehouse rents in<br />
smaller cities also decreased by around 7% quarter-on-quarter<br />
due to limited interest from large-format retailers.<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> investment volumes totalled €221 mn in <strong>Q1</strong>. The largest<br />
single-property transaction recorded over the quarter was the<br />
acquisition of the Alfa Olsztyn shopping centre by Rockspring for<br />
€84 mn. Shopping centre yields moved in by 25 bps in many of<br />
the cities surveyed, but held firm in the capital. Prime high street<br />
yields were unchanged in all of the locations surveyed.<br />
OUTLOOK<br />
Despite forecasts of slowdown, the Polish economy should<br />
continue to outperform most of Europe in <strong>2012</strong>. Poland is an<br />
attractive expansion target and demand for new space will remain<br />
healthy, albeit selective. Prime rents will be supported by limited<br />
availability, possibly coming under upward pressure in the most<br />
sought-after locations. The gap between prime and secondary<br />
locations will widen, with the latter attracting little interest.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Generally stable, with moderate growth<br />
possible in the most sought-after locations.<br />
Prime Yields: May come under further downward pressure,<br />
with a number of schemes under negotiation.<br />
Supply: Healthy pipeline in the large regional cities;<br />
limited in the capital.<br />
Demand: Strong interest from large international<br />
players, weak from smaller tenants.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Warsaw 85.0 1,020 126.2 4.0 0.0<br />
Krakow 79.0 948 117.3 5.7 1.3<br />
Katowice 59.0 708 87.6 5.6 1.7<br />
Poznan 58.0 696 86.1 6.2 0.0<br />
Lodz 28.0 336 41.6 -1.4 -3.4<br />
Wroclaw 46.0 552 68.3 1.4 -4.2<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Warsaw 7.75 7.75 8.25 12.50 7.25<br />
Krakow 8.00 8.00 8.50 14.00 7.75<br />
Katowice 8.00 8.00 9.00 14.00 8.00<br />
Poznan 8.00 8.00 9.00 13.00 8.00<br />
Lodz 8.00 8.00 9.00 14.00 8.00<br />
Wroclaw 8.00 8.00 9.00 14.00 8.00<br />
STAND ALONE RETAIL WAREHOUSING CURRENT LAST LAST 10 YEAR<br />
UNITS (FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Poland 8.00 8.00 8.00 13.00 6.25<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Poland 6.00 6.00 6.50 9.50 5.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
10.00%<br />
9.00%<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
25.0%<br />
15.0%<br />
-5.0%<br />
-15.0%<br />
-25.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
PORTUGAL<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to Statistics Portugal, GDP<br />
contracted by 2.8% year-on-year in the<br />
fourth quarter and 1.6% for the whole<br />
2011. <strong>Retail</strong> sales continue to decline<br />
against a backdrop of austerity measures,<br />
with volumes (excluding automotive fuel) decreasing 8.5% yearon-year<br />
in February. The fall in consumption is expected to<br />
continue, preserving the downward trajectory in retail sales in<br />
the short term.<br />
OCCUPIER FOCUS<br />
Occupier activity has continued to focus on prime high streets in<br />
<strong>Q1</strong>. International retailers have targeted high street locations as<br />
part of their expansion plans, viewing the current market as an<br />
opportunity to obtain favourable property terms on any deals.<br />
Limited availability has allowed prime rents to remain relatively<br />
unchanged over the quarter across all sub-sectors. The pipeline<br />
of developments continues to adjust, 11 schemes are still<br />
scheduled for a 2014 completion, however, only 2 of these are<br />
under construction leaving a high level of uncertainty for the<br />
other schemes. There is a strong focus by some owners to<br />
refurbish existing schemes and optimise their tenant mix in order<br />
to keep them as competitive as possible.<br />
INVESTMENT FOCUS<br />
The continued decrease in consumer spending means many<br />
institutional investors remain wary of investing in this sector,<br />
however prime assets remain attractive. Investors’ main focus will<br />
be the prime high streets and the food sector, where sales have<br />
not been impacted as greatly as other segments. Prime yields<br />
have remained stable over the quarter.<br />
OUTLOOK<br />
Consumer confidence recovered slightly in the latter part of <strong>Q1</strong>,<br />
driven by Manufacturing, Industry and Trade. This development<br />
has halted the negative momentum observed since the end of<br />
2009, albeit still close to the minimum recorded level of January<br />
<strong>2012</strong>. A contraction in disposable household income will continue<br />
in <strong>2012</strong> and is expected to result in increased pressure on the<br />
retail sector. <strong>Retail</strong>ers and landlords will need to innovate and<br />
optimise their offer in order to survive this market correction.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime locations will remain stable, supported<br />
by limited availability.<br />
Prime Yields: Expected to remain unchanged, but may soften<br />
due to weak demand<br />
Supply: The pipeline is adjusting but supply is expected<br />
to be low in the short term<br />
Demand: Stable for the most sought-after locations.<br />
Demand for secondary locations will fall.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Lisbon (Chiado) 80 960 119 1.3 0.0<br />
Lisbon (Avenida Liberdade) 73 870 108 -0.7 0.0<br />
RETAIL PARKS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Portugal 9.00 108 13.4 -5.6 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Lisbon (Chiado)* 7.00 7.00 6.50 7.00 6.00<br />
Lisbon (Avenida Liberdade) 7.25 7.25 6.75 7.25 6.00<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Portugal 10.00 10.00 8.25 10.00 5.75<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Portugal 7.75 7.75 6.75 7.75 5.00<br />
NOTE: * 9 year record<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
10.0%<br />
-5.0%<br />
-10.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
ROMANIA<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to National Institute of Statistics<br />
(INS), the economy contracted by 0.2% in<br />
Q4 2011 quarter-on-quarter, but expanded<br />
1.9% on the same period in 2010.<br />
Nevertheless, consumer spending grew and<br />
retail sales (excluding motor vehicles and motor cycles)<br />
continued on their upward trajectory, rising by an adjusted 3.0%<br />
in February year-on-year, the fifth consecutive positive month.<br />
The latest results were driven by impressive food, beverages and<br />
tobacco sales, which rose by 7.2%. In contrast, non-food and fuel<br />
sales fell by 0.9% and 0.1% respectively.<br />
OCCUPIER FOCUS<br />
Occupier demand continues to be supported by international<br />
(primarily <strong>European</strong>) fashion brands and grocers, keen to take<br />
advantage of a tenant’s market. Newcomers are becoming<br />
evident through the signing of a number of pre-lease contracts.<br />
Elsewhere, strong retailers are again evaluating expansion<br />
opportunities; while struggling operators have shown signs of<br />
recovery.<br />
In 2011, there were 215,234 sq.m of shopping centre space<br />
delivered onto the market, representing a 16.2% year-on-year<br />
increase. The new stock consisted of six new schemes and six<br />
extensions, with the main openings including: Maritimo Shopping<br />
Center in Constanta, Electroputere Parc in Craiova and Galleria<br />
in Arad. No new schemes were opened in the first quarter of<br />
<strong>2012</strong>, with the second phase (3,564 sq.m) of a small retail park<br />
developed by InterCora in Campina the only development of<br />
note.<br />
INVESTMENT FOCUS<br />
Investment market activity came to a virtual standstill in <strong>Q1</strong> <strong>2012</strong>,<br />
with no retail acquisitions completed. 2011 was overall a subdued<br />
year, with a total of €43 million worth of retail assets traded.<br />
Notwithstanding limited activity, prime yields hardened across<br />
the sector over the quarter as values declined by 25 bps points<br />
for retail warehouses and by 25-50 bps for shopping centres.<br />
With the exception of Brasov – where prime values hardened by<br />
25 bps – high streets values remained largely unchanged.<br />
OUTLOOK<br />
Economic activity in <strong>2012</strong> is forecast to grow modestly;<br />
nevertheless, the occupier and investment market are expected<br />
to perform well as players take advantage of attractive pricing and<br />
a looser monetary policy. Although prime values will remain<br />
generally unchanged, a select number of prime shopping centres<br />
and high street locations may harden and fall respectively as the<br />
year progresses.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Generally stable, but prime shopping centre<br />
rents may see increases in <strong>2012</strong>.<br />
Prime Yields: Yields to remain largely unchanged, although<br />
high streets values may harden.<br />
Supply: A steady stream of new projects added to the<br />
shopping centre pipeline.<br />
Demand: Demand to be supported by improved trading<br />
conditions.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Bucharest (Magheru<br />
Boulevard) 60.0 720 89.1 -11.4 -7.7<br />
Bucharest (Calea Victoriei) 55.0 660 81.7 -11.3 0.0<br />
Brasov 40.0 480 59.4 0.0 33.3<br />
Timisoara 35.0 420 52.0 -2.6 0.0<br />
Constanta 25.0 300 37.1 -9.0 -7.4<br />
Cluj Napoca* 35.0 420 52.0 -10.2 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Bucharest (Magheru<br />
Boulevard) 9.25 9.25 9.25 16.00 7.50<br />
Bucharest (Calea Victoriei) 9.25 9.25 9.25 15.00 7.50<br />
Brasov 9.75 10.00 10.00 14.00 8.00<br />
Timisoara 10.00 10.00 10.00 14.00 8.00<br />
Constanta 10.00 10.00 10.00 14.00 8.00<br />
Cluj Napoca* 10.00 10.00 10.00 12.00 8.00<br />
SHOPPING CENTRES<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Romania<br />
NOTE: * 6 year record<br />
8.50 9.00 9.00 9.00 6.25<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
11.50%<br />
10.00%<br />
8.50%<br />
7.00%<br />
5.50%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
35.0%<br />
17.5%<br />
-17.5%<br />
-35.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
RUSSIA<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
According to Rosstat, GDP grew 4.8%<br />
year-on-year in the fourth quarter of 2011<br />
and 4.3% over the year as a whole. In<br />
February, inflation slowed to a post-Soviet<br />
record of 3.7%, partly due to the<br />
government’s decision to delay the annual increases in utilities<br />
tariffs ahead of the presidential elections. <strong>Retail</strong> sales have<br />
continued to increase, with volumes rising by 7.7% year-on-year<br />
in February, 6.8% in January and 9.5% in December.<br />
OCCUPIER FOCUS<br />
Many retailers are actively expanding, with strong interest in the<br />
regions and several new entries expected in the coming months.<br />
Prime rents were stable for the third consecutive quarter across<br />
all sub-sectors. Due to restrictions on construction, development<br />
activity in Moscow has slowed considerably: no new projects<br />
have been announced in recent months, and only one new<br />
scheme was delivered over the quarter – the retail gallery within<br />
the Moskva hotel near Red Square. Activity in the capital has<br />
shifted towards the outskirts, with several projects under<br />
construction beyond the Third Transport Ring. Vacancy in highquality,<br />
established shopping centres in the capital is below 1%. In<br />
the regions, the pipeline is healthy; recent completions include<br />
KomsoMall in Volgograd and the third phase of Krasnaya<br />
Ploschad in Krasnodar.<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> investment volumes totalled €942 mn over the quarter, the<br />
second-highest quarterly figure on record after Q3 2007. Much of<br />
the total is accounted for by the acquisition of the Galeria<br />
shopping centre in St Petersburg by Morgan Stanley Real estate<br />
Fund VII for €836 mn, the largest transaction ever recorded on<br />
the Russian real estate market. Built in 2010, the 93,000 sq.m<br />
Galeria is the largest shopping centre in St Petersburg. Prime<br />
yields were unchanged over the quarter.<br />
OUTLOOK<br />
Going forward, demand for prime highs streets and shopping<br />
centres will remain strong, with many retailers in expansion<br />
mode. However, inflation is likely to surge in the summer when<br />
utility tariffs are increased, and sales growth could potentially<br />
slow in the second half. While rents appear to have stabilised<br />
after coming under upward pressure in late 2010 and early 2011,<br />
further growth is possible in Moscow, with vacancy close to zero<br />
in the most sought-after shopping centres and development at a<br />
virtual standstill. Morgan Stanley’s acquisition of Galeria is<br />
evidence of strong demand for prime retail assets in Russia’s<br />
regions, and a healthy level of investment activity is expected in<br />
the coming months.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable overall, with growth possible in top<br />
Moscow shopping centres.<br />
Prime Yields: Expected to hold firm.<br />
Supply: Healthy pipeline in the regions and in Moscow<br />
outskirts; shortage in central Moscow.<br />
Demand: Strong, with many retailers expanding, and<br />
growing interest in the regions.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS US$ € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Moscow (Tverskaya) 4,500 3,379 418 10.0 12.5<br />
Moscow (Novy Arbat) 2,500 1,877 232 2.6 0.0<br />
St Petersburg 2,500 1,877 232 35.4 25.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
SHOPPING CENTRES<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 6 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Moscow 9.25 9.25 9.50 13.00 8.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
16.00%<br />
13.00%<br />
10.00%<br />
7.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
35.0%<br />
17.5%<br />
-17.5%<br />
-35.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
SERBIA<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
GDP increased by 1.6% in 2011, with<br />
growth slowing considerably in the second<br />
half and unemployment climbing to nearly<br />
24% in November. <strong>Retail</strong> sales have been<br />
on a downward trajectory since January<br />
2011. According to the latest figures from the Statistical Office of<br />
the Republic of Serbia, sales volume declined by 5.8% year-onyear<br />
in February and 3.7% in January; this follows declines of 15-<br />
20% in the preceding nine months.<br />
OCCUPIER FOCUS<br />
In light of this year’s disappointing sales figures, most occupiers<br />
remain cautious. Serbia was granted EU candidate status on 1<br />
March. While entry talks could take several years with no<br />
guarantee of admission, it is hoped that EU integration will bring<br />
significant economic benefits, as well as sending a positive signal<br />
to retailers, investors and developers. Indeed, Serbia is seen as<br />
having strong long-term potential, and selected retailers have<br />
continued taking advantage of challenging trading conditions to<br />
establish a presence in the country.<br />
Prime rents are supported by limited supply and held firm over<br />
the quarter. Availability of high-quality retail space in Belgrade is<br />
restricted to the main shopping area around Kneza Mihaila and<br />
handful of malls, most of them built in the past five years. No new<br />
shopping centres are scheduled for completion in the capital in<br />
<strong>2012</strong>/13, although there are several centres at the planning stage.<br />
Provision in Kragujevac increased by 22,000 sq.m in March with<br />
the opening of Kragujevac Plaza. It is reported that the shopping<br />
centre, which features leisure facilities including a multiplex<br />
cinema and bowling alley, was 92% let on opening.<br />
INVESTMENT FOCUS<br />
Investment activity remains subdued due to strict lending criteria<br />
and a continued shortage of quality stock. No major transactions<br />
were recorded over the quarter, and yields were unchanged<br />
across all sub-sectors.<br />
OUTLOOK<br />
Economic conditions remain highly challenging, and a recovery<br />
consumer sentiment is unlikely in <strong>2012</strong>. However, the retail<br />
market is underdeveloped relative to other <strong>European</strong> countries,<br />
with significant long-term opportunities for retailers, developers<br />
and investors. With no new shopping centres under construction<br />
in Belgrade, prime rents should hold firm in the coming months.<br />
The retail park and factory outlet formats are growing rapidly,<br />
with several major schemes under construction around the<br />
country. Fashion Park Outlet Center Indjija, the first factory<br />
outlet centre outside of Belgrade, opened on 19 April.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Supported by limited availability; however<br />
landlords becoming increasingly flexible.<br />
Prime Yields: Expected to hold firm in the short term,<br />
although softening is possible.<br />
Supply: No new space in the capital. Growth of<br />
factory outlet and retail warehouse formats.<br />
Demand: Most retailers cautious, with some interest<br />
from international players.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Belgrade (Kneza Mihaila) 92 1,100 136 -3.6 -8.3<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 6 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Belgrade (Kneza Mihaila) 10.50 10.50 10.50 11.00 9.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
12.00%<br />
10.00%<br />
8.00%<br />
6.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
15.0%<br />
10.0%<br />
5.0%<br />
0.0%<br />
-5.0%<br />
-10.0%<br />
-15.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
SLOVAKIA<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Although GDP in Q4 2011 grew by 0.9%<br />
quarter-on-quarter and 3.4% year-on-year,<br />
much of the expansion came as a result of<br />
stronger exports, with consumer spending<br />
actually declining by 0.4% on the same<br />
period in 2010. Nevertheless, annual retail sales growth in the<br />
county bounced back in <strong>Q1</strong> <strong>2012</strong> as sales rose by 1.5% in January<br />
and 2.0% in February. The latest figures were achieved through<br />
record turnover growth in recreational and cultural goods, and<br />
strong fuel sales. That said, it is worth noting that annual<br />
comparisons may be influenced by a relatively weak start to 2011,<br />
when VAT was raised to 20%.<br />
OCCUPIER FOCUS<br />
<strong>Retail</strong>ers continue to expand only in good locations and for<br />
reasonable rents and the best conditions. Occupier demand<br />
remains weak, with tenants unwilling to expand while turnovers<br />
do not grow and vacant units become a visible aspect of the<br />
market. Prime rents remained largely unchanged over the<br />
quarter, with the sole exception of shopping centre values in<br />
Bratislava, which fell by 7.7% on the previous three months.<br />
On the supply side, availability is high allowing tenants greater<br />
choice when expanding. Central shopping centre (35,000 sq.m) is<br />
expected to open in seven months, while a number of other<br />
schemes across the country are also in the planning stage,<br />
potentially boosting future provision.<br />
INVESTMENT FOCUS<br />
There were no deals concluded in the investment market in <strong>Q1</strong><br />
<strong>2012</strong>. This was in contrast to a very strong end to 2011 when<br />
€151 million worth of retail assets were traded and total trading<br />
volumes reached the highest figure in four years (€191), marking<br />
retail assets as the preferred real estate investment product.<br />
OUTLOOK<br />
Notwithstanding strong economic figures in 2011, Consensus<br />
forecasts for <strong>2012</strong> are considerably more restrained, with GDP<br />
expected to grow by 1.1% on last year. While exports will slow<br />
as a result of waning external demand, consumer spending is not<br />
expected to pick up the slack. Despite witnessing some marginal<br />
improvement in recent months, the consumer confidence index<br />
remains largely pessimistic and is unlikely to receive some respite<br />
in <strong>2012</strong> as it’s weighed down by austerity measures. Prime rents<br />
are expected to either remain stable or soften slightly over the<br />
course of the year.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable, although slight falls remain a possibility.<br />
Prime Yields: Anticipated to stay unchanged in the short<br />
term.<br />
Supply: Expected to benefit from the addition of<br />
shopping centre space in <strong>2012</strong>/2013.<br />
Demand: Stable and centered on prime locations.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS €<br />
SQ.M/MTH<br />
€<br />
SQ.M/YR<br />
US$<br />
SQ.FT/YR<br />
GROWTH % CAGR<br />
5YR 1YR<br />
Bratislava 42 504 62 -9.2 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT<br />
QUARTER<br />
LAST<br />
QUARTER<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
LAST<br />
YEAR<br />
10 YEAR<br />
HIGH LOW<br />
Bratislava 7.25 7.25 7.25 16.00 6.00<br />
SHOPPING CENTRES<br />
(FIGURES ARE GROSS)<br />
CURRENT<br />
QUARTER<br />
LAST<br />
QUARTER<br />
LAST<br />
YEAR<br />
10 YEAR<br />
HIGH LOW<br />
Slovakia 7.25 7.25 7.25 7.75 6.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
9.00%<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
35.0%<br />
17.5%<br />
0.0%<br />
-17.5%<br />
-35.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
SPAIN<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
GDP grew 0.3% year-on-year in the fourth<br />
quarter of 2011, and 0.7% over the year as<br />
a whole, with household consumption<br />
declining by 0.1% compared with 2010.<br />
Unemployment reached nearly 23% in Q4,<br />
and retail sales have continued to decline: sales volumes<br />
(excluding service stations) decreased by 2.9% year-on-year in<br />
February, 4.2% in January and 6.4% in December.<br />
OCCUPIER FOCUS<br />
Demand for prime high streets, shopping centres and retail parks<br />
remains strong, with several major international players looking<br />
to increase their presence. Prime rents are supported by limited<br />
availability and were stable over the quarter in most of the<br />
locations surveyed. However, secondary locations are<br />
experiencing falling demand, with a number of retailers closing<br />
unprofitable stores.<br />
Despite challenging trading conditions, new schemes with an<br />
attractive catchment area are attracting a healthy level of interest.<br />
Indeed, it has recently been reported that the shopping centre<br />
element of Puerto Venecia in Zaragoza (123,500 sq.m GLA),<br />
scheduled for completion in the autumn, is 75% pre-let. Other<br />
major projects scheduled for completion this year include As<br />
Cancelas in Santiago de Compostela (50,000 sq.m) and Gran<br />
Plaza 2 in Marid (45,800 sq.m).<br />
INVESTMENT FOCUS<br />
<strong>Retail</strong> investment volume totalled €20 mn in the first quarter.<br />
While this represents a considerable decline relative to the<br />
previous quarter’s total of €337 mn, the Q4 figure was skewed<br />
by Unibail-Rodamco’s purchase of Splau shopping centre in<br />
Barcelona for €186 mn. Transactions in <strong>Q1</strong> include the<br />
acquisition of Bahía Mar shopping centre in Cádiz by local<br />
property firm Grupo Soluciones for €6.5 mn. Prime yields held<br />
firm for most of the high street locations surveyed and for prime<br />
in-town shopping centres in Tier 1 cities, moving out by up to 25<br />
bps elsewhere. Yields for stand-alone retail warehouse units in<br />
the major provincial capitals moved out by 75 bps.<br />
OUTLOOK<br />
A recovery in sales looks improbable in the short term, with<br />
further austerity measures expected to impact on consumer<br />
spending. However, dominant locations will continue to attract a<br />
healthy level of interest, and prime rents should remain stable.<br />
Secondary rents, on the other hand, are likely to come under<br />
further downward pressure as demand for new space becomes<br />
increasingly selective.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime rents are well-supported and expected<br />
to remain stable in the short term.<br />
Prime Yields: Should hold firm.<br />
Supply: Low for prime properties and high for<br />
secondary.<br />
Demand: Strong for prime locations; two-tier market<br />
becoming more deeply entrenched.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Madrid 240 2,880 356 0.0 0.0<br />
Barcelona 265 3,180 393 8.0 1.9<br />
Seville 120 1,440 178 0.0 0.0<br />
Bilbao 120 1,440 178 1.8 0.0<br />
Valencia 130 1,560 193 0.8 0.0<br />
Malaga 145 1,740 215 2.2 0.0<br />
Palma 85 1,020 126 2.5 0.0<br />
Zaragoza 100 1,200 148 0.0 -4.8<br />
RETAIL PARKS € € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Madrid 17.50 210 26.0 1.8 0.0<br />
Barcelona 17.00 204 25.2 3.2 0.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Madrid 4.85 4.85 4.75 5.75 4.00<br />
Barcelona 4.85 4.85 4.75 5.75 4.00<br />
Seville 5.50 5.50 5.25 6.00 4.50<br />
Bilbao 5.50 5.50 5.50 6.25 4.50<br />
Valencia 5.50 5.50 5.25 6.00 4.50<br />
Malaga 5.50 5.50 5.25 6.50 4.50<br />
Palma 5.50 5.50 5.50 6.50 4.50<br />
Zaragoza 5.50 5.50 5.50 6.50 4.50<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Madrid 6.75 6.50 6.50 7.50 4.70<br />
Barcelona 6.75 6.50 6.50 7.50 4.70<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Spain 6.00 6.00 6.00 6.50 4.25<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
SWEDEN<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
<strong>Retail</strong> sale volumes in the country recorded<br />
their fourth consecutive period of annual<br />
growth in February, rising by 3.4%.<br />
According to Statistics Sweden, this was<br />
achieved through strong sales of durables<br />
(4.6%) – where a double-digit sales rise in footwear and sporting<br />
goods sales drove the overall rate – and moderate growth in<br />
consumables (1.9%). Despite a slowing economy, the latest<br />
figures were supported by interest rate cuts and improved<br />
consumer confidence, painting a relatively benign picture of the<br />
retail market.<br />
OCCUPIER FOCUS<br />
Occupier demand is stable, but especially active for space in<br />
prime locations. This is fuelled by a number of international<br />
retailers eager to establish their first store in the country.<br />
However, supply of prime high street space is at a premium,<br />
particularly in the capital, translating into elevated rents and key<br />
money. Nevertheless, rental growth was restricted to prime<br />
retail parks, with values in other sub-sectors stable.<br />
The supply of shopping centre space is increasing slightly as a<br />
result of several extensions across major cities. Furthermore,<br />
modern retail provision is expected to continue improving with<br />
the addition of a several large schemes, scheduled to open by the<br />
end of 2015.<br />
INVESTMENT FOCUS<br />
Investment market activity slowed considerably in <strong>Q1</strong>as only €78<br />
million worth of retail assets were traded, a sharp fall on €761<br />
million transacted in Q4 2011. However, a number of large<br />
shopping centres are anticipated to come onto the market in the<br />
year ahead and several quality retail properties are already on<br />
sale. When combined with good interest from international<br />
buyers, activity in <strong>2012</strong> is expected to regain the vibrancy<br />
witnessed in 2011. Prime yields in <strong>Q1</strong> remained stable on the<br />
previous three months.<br />
OUTLOOK<br />
Looking ahead, the strong economic momentum observed over<br />
the past two years is not expected to be maintained in <strong>2012</strong>, with<br />
Consensus forecasts anticipating a mild contraction in<br />
manufacturing and modest growth in consumer spending. Prime<br />
values are expected to hold firm over the course of the year,<br />
although rental growth in selected retail parks and high streets<br />
may eventually materialise.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable, although selected high streets and retail<br />
parks may see some growth in <strong>2012</strong>.<br />
Prime Yields: Yields unlikely to change in the short-term.<br />
Supply: Availability extremely scarce in prime pitches.<br />
Several shopping centres in the pipeline.<br />
Demand: Centered on prime locations, but expected to<br />
remain stable.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS Skr € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Stockholm 14,600 1,652 204 4.0 4.3<br />
Gothenburg 8,050 911 113 2.0 0.6<br />
Malmo 6,200 702 87 1.3 1.6<br />
RETAIL PARKS Skr € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Stockholm (Kungens Kurva) 1,875 212 26.3 0.8 5.6<br />
Stockholm (Barkarby) 1,875 212 26.3 0.8 5.6<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Stockholm 5.00 5.00 5.00 6.00 4.50<br />
Gothenburg 5.50 5.50 5.75 6.50 5.25<br />
Malmo 5.50 5.50 5.75 7.00 5.50<br />
RETAIL PARKS<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Stockholm (Kungens Kurva) 5.75 5.75 6.00 7.25 5.00<br />
Stockholm (Barkarby) 5.75 5.75 6.00 7.25 5.00<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Sweden 5.00 5.00 5.25 6.50 4.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
10.0%<br />
-5.0%<br />
-10.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
5.0%<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
SWITZERLAND<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Economic growth returned in Q4 with<br />
GDP up 1.3% compared with Q4 2010 and<br />
growing 0.1% from Q3. Consumer<br />
confidence has increased slightly this<br />
quarter although it remains low.<br />
Preliminary data from the State Secretariat for Economic Affairs<br />
(SECO) shows Q4 retail sales volume (excluding fuel) grew 0.4%<br />
year-on-year in February. The non-food sector experienced<br />
negative growth of 0.5% over the same period.<br />
OCCUPIER FOCUS<br />
Demand for prime high street retail in key cities remains and a<br />
lack of supply is reflected in stable rental levels. Despite most<br />
retailers forecasting a continued decrease in revenue, prime high<br />
street locations are still sought after. International luxury retailers<br />
continue to be the preferred occupiers of prime central retail<br />
units for most landlords and in Geneva there is a trend for local<br />
shops and restaurants to exit the CBD when their leases expire.<br />
The retail warehousing sector saw a slight decrease in rental<br />
levels over the quarter, however landlords are beginning to offer<br />
longer rent free periods in an effort to prevent further rental<br />
falls.<br />
The shopping centre development pipeline for <strong>2012</strong> is limited,<br />
with the focus on refurbishment and extensions of existing stock.<br />
INVESTMENT FOCUS<br />
It is difficult to ascertain the exact number of transactions and<br />
trading volumes due to many deals being completed off market.<br />
However, activity in the retail investment market in <strong>Q1</strong> was<br />
estimated to be worth €150 mn, double the level recorded in the<br />
previous two quarters. Price correction has not been as severe as<br />
most other Western <strong>European</strong> markets and as a result prime<br />
yields have remained stable across all retail sectors in <strong>Q1</strong>.<br />
OUTLOOK<br />
The economic environment for <strong>2012</strong> does not favour an increase<br />
in private consumption, however the outlook is for stability in<br />
prime locations due to occupier demand exceeding supply in<br />
these markets. Secondary locations are expected to experience a<br />
fall in rental levels as retailers continue to focus on locating in the<br />
best and most established retail destinations. The investment<br />
market is also expected to remain stable. Yield levels will be<br />
dependent upon the economic policy adopted by the Swiss<br />
National Bank and how quickly it decides to raise interest rates in<br />
line with the ECB.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Stable prime values in city centres, with<br />
potential falls in secondary locations.<br />
Prime Yields: Unlikely to see adjustments in the short term.<br />
Dependent on interest rate decisions<br />
Supply: Tight supply in prime locations, exacerbated<br />
by a limited shopping centre pipeline.<br />
Demand: Continued strong demand for prime locations<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS Sfr € US$ GROWTH % CAGR<br />
SQ.M/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Zurich (Bahnhofstrasse) 8,500 7,062 874 5.5 6.3<br />
Geneva (Rue du Rhône) 4,000 3,323 411 2.7 0.0<br />
Basle (Freie Strasse) 2,900 2,409 298 3.0 3.6<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Zurich (Bahnhofstrasse) 4.40 4.50 4.50 5.00 4.00<br />
Geneva (Rue du Rhône)* 5.00 5.00 5.00 5.75 5.00<br />
Basle (Freie Strasse) 5.10 5.20 5.60 5.75 5.10<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Switzerland 5.30 5.30 5.50 6.00 5.25<br />
Note: * Yields in Geneva are quoted Net.<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
15.0%<br />
10.0%<br />
5.0%<br />
0.0%<br />
-5.0%<br />
-10.0%<br />
-15.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
TURKEY<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
As widely anticipated, the Turkish economy<br />
slowed towards the end of 2011, with GDP<br />
expanding by an adjusted 4.7% year-on-year<br />
and 0.6% on the previous quarter. Although<br />
Turkish retail data is often subject to<br />
significant revisions by the Turkish Statistical Institute, the latest<br />
figures prolonged the double-digit upward trend seen in previous<br />
quarters, with retail sales growing by 12.6% in Q4 2011 on the<br />
same period in 2010, albeit lower than the 16.8% recorded in<br />
Q3.<br />
OCCUPIER FOCUS<br />
While most retailers have adopted a ‘wait and see’ policy with<br />
regard to expansion, occupier demand for high quality prime high<br />
streets and shopping centres continues to exceed supply. In<br />
Istanbul, a city with a population of approximately 17 million,<br />
there are only three high street locations and one shopping<br />
centre which fit this category fully. Consequently, the limited<br />
supply of such space has translated into less favourable terms for<br />
potential tenants in the form of higher rents and key money<br />
demanded. Indeed, the demand/supply imbalance has resulted in<br />
strong double-digit growth over the quarter in prime high street<br />
locations, and a rise of almost 10% in prime shopping centres<br />
across the country.<br />
The provision of high quality prime space will however improve<br />
as the prime locations of yesterday are gradually transformed into<br />
the high quality prime locations of tomorrow. In the shopping<br />
centre market, supply will also be boosted by the addition of<br />
another 82 new schemes scheduled to open by the end of 2014.<br />
INVESTMENT FOCUS<br />
The first quarter of the year proved to be another subdued<br />
period for the investment market, with no retail transactions<br />
taking place. Activity centred entirely on office products, with<br />
other sectors highly illiquid. Prime yields adjustments were<br />
somewhat mixed as high street units in select locations softened<br />
by 25 bps and shopping centres hardened by 25-50 bps.<br />
OUTLOOK<br />
A slowing economy, concerns about the current account deficit<br />
and political instability in the region will present the country with<br />
some challenges ahead. Nevertheless, positive signs are also<br />
evident, with unemployment still low and consumer sentiment<br />
bouncing back to a nine-month high in March. Hotspots of<br />
growth will include the high quality prime locations, the new<br />
shopping centre in Beylikduzu and several smaller regional<br />
schemes near planned train stations.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Despite recent rises, some falls are expected<br />
in the year ahead.<br />
Prime Yields: Yields to remain stable, although corrections<br />
cannot be ruled out.<br />
Supply: Substantial new supply in the pipeline, but<br />
availability of prime space is low.<br />
Demand: Strong interest in prime locations to offset<br />
slower activity elsewhere.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS US$ € US$ GROWTH % CAGR<br />
SQ.M/MTH SQ.M/YR SQ.FT/YR 5YR 1YR<br />
Istanbul 350 3,154 390 n/a n/a<br />
Izmir 85 766 95 n/a n/a<br />
Ankara 90 811 100 n/a n/a<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE GROSS)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Istanbul 7.25 7.25 7.50 14.50 7.25<br />
Izmir 10.50 10.50 10.75 14.50 10.50<br />
Ankara 10.25 10.25 10.50 15.50 10.25<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE GROSS)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Istanbul 7.25 7.75 8.25 14.50 7.00<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
RECENT PERFORMANCE<br />
12.00%<br />
10.00%<br />
8.00%<br />
6.00%<br />
4.00%<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12<br />
30.0%<br />
15.0%<br />
-15.0%<br />
-30.0%<br />
This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial property solely for information purposes.<br />
It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources<br />
which Cushman & Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete.<br />
No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman &<br />
Wakefield LLP shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change.<br />
Our prior written consent is required before this report can be reproduced in whole or in part. Should you not wish to receive information from Cushman<br />
& Wakefield LLP or any related company, please email unsubscribe@eur.cushwake.com with your details in the body of your email as they appear on this<br />
communication and head it “Unsubscribe”. ©<strong>2012</strong> Cushman & Wakefield LLP. All rights reserved.<br />
0.0%<br />
AVERAGE PRIME YIELDS (left) RENTAL GROWTH (right)
MARKETBEAT<br />
RETAIL SNAPSHOT<br />
UNITED KINGDOM<br />
A Cushman & Wakefield Research Publication<br />
OVERVIEW<br />
Bolstered by good weather and fuel panic<br />
buying, retail sales in March recorded their<br />
highest uplift in over a year, rising by 3.3%<br />
on the same month in 2011. The overall<br />
rate was supported by strong growth in<br />
specialised stores selling automotive fuel (7.2%) and non-food<br />
shops (4.6%). In contrast, food stores continued to lag behind as<br />
sales eased back by 0.6%.<br />
OCCUPIER FOCUS<br />
In-town occupier demand in the wider UK market remains weak<br />
as retailers rationalise exposure and focus their attention on their<br />
more profitable stores, predominantly in the South East or large<br />
cities, where footfall and consumer spending remain resilient.<br />
Prime rents in the South East were stable; however, they are<br />
coming under increasing pressure, with fewer retailers looking to<br />
expand. Out-of-town occupier demand for prime open A1<br />
schemes remained unchanged, but with supply still low. In prime<br />
bulky goods retail parks there has been an increase in incentive<br />
packages by three to six months, but headline rents appear to<br />
have maintained their values. The softening in incentives is even<br />
more pronounced for secondary stock, highlighting the<br />
downward squeeze on rents which persists for locations with<br />
very low demand and plenty of available space.<br />
INVESTMENT FOCUS<br />
Prime high street assets held up well over the quarter, primarily<br />
due to a shortage of supply. The larger institutional funds are still<br />
active, but without any pressure to spend. Investment demand for<br />
secondary products remained sporadic at best, with limited intent<br />
to invest other than from opportunity funds. The majority of<br />
stock which is coming to the market is principally within the<br />
smaller sub £5 million category. Meanwhile, demand for prime<br />
shopping centres continued to be sustained by international<br />
players; however, both prime and secondary witnessed a fall in<br />
interest. Demand is coming primarily from opportunity funds, but<br />
they are also finding it increasingly difficult to obtain debt. Supply<br />
has also deteriorated, with vendors discouraged by the long list<br />
of schemes withdrawn from the market.<br />
OUTLOOK<br />
The occupier market may remain subdued but stable, despite a<br />
mixed outlook for the rest of <strong>2012</strong>. Nationally, demand for<br />
secondary retail units will be under pressure, and locations<br />
outside Central London may see further rental declines and<br />
softening incentives. The investment market picture also remains<br />
mixed, with the potential for significant downside in secondary<br />
markets. However, demand will remain robust for prime, core,<br />
secure income assets in strong centres and cities.<br />
Cushman & Wakefield LLP<br />
43-45 Portman Square<br />
London W1A 3BG<br />
www.cushmanwakefield.com/knowledge<br />
MARKET OUTLOOK<br />
Prime Rents: Prime values largely unchanged, but under<br />
increasing pressure in some areas.<br />
Prime Yields: Stable, but with potential softening in high<br />
street and shopping centre yields outside<br />
Central London and strong retail centres.<br />
Supply: Limited in prime locations; but rising in<br />
secondary areas.<br />
Demand: Demand to remain selective.<br />
PRIME RETAIL RENTS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS ZONE A £ € US$ GROWTH % CAGR<br />
SQ.FT/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
London (City) 230 1,515 187 -2.4 4.5<br />
London (West End) 985 7,632 944 6.3 3.7<br />
Manchester 250 1,647 204 -5.1 0.0<br />
Birmingham 250 1,647 204 -4.8 0.0<br />
Leeds 250 1,647 204 -3.9 0.0<br />
Cardiff 225 1,482 183 -5.6 0.0<br />
Edinburgh 200 1,776 220 0.0 0.0<br />
Glasgow 255 2,264 280 -1.0 2.0<br />
RETAIL WAREHOUSING £ € US$ GROWTH % CAGR<br />
SQ.FT/YR SQ.M/YR SQ.FT/YR 5YR 1YR<br />
London (Bulky goods) 32.50 420 51.9 -1.5 8.3<br />
Edinburgh (Bulky goods) 20.00 258 32.0 -7.8 -7.0<br />
PRIME RETAIL YIELDS – MARCH <strong>2012</strong><br />
HIGH STREET SHOPS<br />
(FIGURES ARE NET)<br />
CURRENT LAST LAST 10 YEAR<br />
QUARTER QUARTER YEAR HIGH LOW<br />
London (City) 5.25 5.25 5.50 6.50 4.75<br />
London (West End) 3.00 3.00 3.00 5.00 3.00<br />
Manchester 5.25 5.25 5.25 6.75 4.25<br />
Birmingham 5.75 5.75 5.75 6.75 4.25<br />
Leeds 5.25 5.25 5.25 6.25 4.25<br />
Cardiff 5.25 5.25 5.25 6.50 4.00<br />
Edinburgh 5.25 5.25 5.50 7.00 4.00<br />
Glasgow 5.00 5.00 5.00 6.75 4.00<br />
RETAIL WAREHOUSING<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Solus – Bulky goods 6.00 6.00 6.00 8.50 4.50<br />
Park – Open consent 5.25 5.25 5.25 7.25 4.00<br />
SHOPPING CENTRES<br />
CURRENT LAST LAST 10 YEAR<br />
(FIGURES ARE NET)<br />
QUARTER QUARTER YEAR HIGH LOW<br />
Regional Centre 5.50 5.50 5.50 7.00 4.50<br />
With respect to the yield data provided, in light of the lack of recent comparable market evidence in many areas of<br />
Europe and the changing nature of the market and the costs implicit in any transaction, such as financing, these are very<br />
much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used<br />
as a comparable for any particular property or transaction without regard to the specifics of the property.<br />
Source: Cushman & Wakefield<br />
<strong>Q1</strong> <strong>2012</strong><br />
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