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LONDON: Property consultant Jones Lang LaSalle said on Wednesday Jan 6, 2009 it expects a challenging 2010 for European commercial property, but sees deal volumes up 20 percent on 2009 to 85 billion euros (US$122.1 billion).
"Investors will find it difficult to secure product, to identify value and to establish pricing levels. Many investors and banks will still be working through legacy issues and refinancing remains a major concern," JLL's director of European capital markets, Chris Staveley, said in a statement.
"Investment volumes across Europe in 2010 will remain low compared with long term trends, but we still expect an increase of up to 20 percent on 2009 taking us back to 2002 levels of around 85 billion euros," he said.
Chairman of European research, Nigel Roberts, said JLL expected the German and French markets to show higher levels of liquidity in 2010, against 2009, with relative pricing back in fashion.
"As pricing in London and other core investment markets becomes too keen for some investors at this phase of the cycle, capital will start to move around Europe," Roberts said.
Across Europe, he expects office rental markets to recover more quickly in this cycle due to the tightening of the development pipeline, many projects postponed or cancelled.
"Overall in Europe we expect the pipeline in 2010 to be down almost 30 percent on 2009 and this will, in part, provide impetus for the eventual recovery in rents," he said.
JLL is picking European gross leasing volumes to rise 15 percent in 2010, against 2009, although over the next five years take-up is unlikely to recover even to historic average levels."
In 2009, gross leasing volumes were down 30 percent on 2008. JLL also sees 2010 prime office rents in Europe falling about 3 percent, followed by limited rental growth in 2011.
"The exception to this trend will be markets which corrected the most during the downturn, some of which could see the start of a more significant bounce-back driven by supply shortages," Roberts said.
Good quality retail space in both high streets and shopping centres was still in demand. Prime high street rents will fall about 2 percent in 2010, while prime shopping centre rents will remain largely stable.
"Some high street markets such as Hamburg, London and Munich will prove the exception and we expect to witness rental growth," Roberts said. -- Reuters
"Investors will find it difficult to secure product, to identify value and to establish pricing levels. Many investors and banks will still be working through legacy issues and refinancing remains a major concern," JLL's director of European capital markets, Chris Staveley, said in a statement.
"Investment volumes across Europe in 2010 will remain low compared with long term trends, but we still expect an increase of up to 20 percent on 2009 taking us back to 2002 levels of around 85 billion euros," he said.
Chairman of European research, Nigel Roberts, said JLL expected the German and French markets to show higher levels of liquidity in 2010, against 2009, with relative pricing back in fashion.
"As pricing in London and other core investment markets becomes too keen for some investors at this phase of the cycle, capital will start to move around Europe," Roberts said.
Across Europe, he expects office rental markets to recover more quickly in this cycle due to the tightening of the development pipeline, many projects postponed or cancelled.
"Overall in Europe we expect the pipeline in 2010 to be down almost 30 percent on 2009 and this will, in part, provide impetus for the eventual recovery in rents," he said.
JLL is picking European gross leasing volumes to rise 15 percent in 2010, against 2009, although over the next five years take-up is unlikely to recover even to historic average levels."
In 2009, gross leasing volumes were down 30 percent on 2008. JLL also sees 2010 prime office rents in Europe falling about 3 percent, followed by limited rental growth in 2011.
"The exception to this trend will be markets which corrected the most during the downturn, some of which could see the start of a more significant bounce-back driven by supply shortages," Roberts said.
Good quality retail space in both high streets and shopping centres was still in demand. Prime high street rents will fall about 2 percent in 2010, while prime shopping centre rents will remain largely stable.
"Some high street markets such as Hamburg, London and Munich will prove the exception and we expect to witness rental growth," Roberts said. -- Reuters
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