European retail rents static
Published: 22 November, 2011
European prime shopping centre rents stable as development pipeline slows
Over the next two years international real estate advisor Savills forecasts rental stability across prime European shopping centre markets as the annual supply of development completions is expected to drop by 12.5 per cent per year on average between 2011 and 2013. This marks a significant contrast to the previous seven years when shopping centre supply across these markets grew annually by 22.4 per cent on average, according to the firm’s data.
The forecast is based on Savills' study of seven European retail markets including Germany, Greece, Italy, Poland, Spain, Turkey and the UK. The long term average annual development completions per year for the seven countries is in the region of 475,000 sq m pa and Savills expects this to drop to approximately 355,000 sq m pa between 2011 and2013.
The UK, at -88 per cent , faces the sharpest drop in completions followed by Spain at -37 per cent, Greece at -27 per cent, Germany at -21 per cent, Italy at -17 per cent and Poland at -10 per cent. In Turkey the pace of development completions is expected to stay in line with the ten year average and Savills sees potential upward movement in prime shopping centre rents in Istanbul over the next two years.
Eri Mitsostergiou, director in Savills European research, says: “A slowing rate of shopping centre development completions in Europe will help avoid oversupply in the markets and keep rents stable and vacancy rates down in the prime shopping centres.”
