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Summer 2009
European Retail Markets
- Consumers are becoming more pessimistic across Europe, which has translated to lower retail sales, especially in the non-food sector. Overall the volume of retail trade in the European Union (EU) grew in April marginally by 0.1% and dropped by 1.4% compared to April 2008.
- Despite the expectation that the crisis is easing, Consumer and Business sentiment indicators in the EU remain low. The majority of retailers are cautious and only value and discount retailers are taking the opportunity to expand.
- Based on the available information regarding the development activity in our survey area, shopping centre completions in 2009, are expected to drop by between 20% and 60%, due to the limited availability of finance, as well as developer reluctance to commence new schemes.
- Both shopping centre and retail warehousing rents have started falling since the end of last year, mainly in the markets that experienced strong growth in recent years. Prime rents are on average about 6% lower compared to 12 months ago.
- Retail investment turnover in our survey area in the first half of the year dropped by more than 55% compared to the same period in 2008. Limited liquidity but also the mismatch between buyer and seller expectations on pricing are the main reasons.
- Over the last three quarters prime retail yields have been experiencing significant correction and they are now on average around 130 basis points (bp) higher than a year ago, at 6.5% for shopping centres and 7.1% for retail warehouses.
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CONTACT
Eri Mitsostergiou +30 210 6996311
emitso@savills.com
Kinga Sistermann +48 22 330 06 37
ksistermann@savills.pl
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