European Market Indicators Spring 2013

research

Spring 2013

european Market Indicators

European rental cycles Offices Geneva, Moscow Berlin, Frankfurt, Hamburg, Helsinki, London (City), London (West End), Stockholm, Warsaw Munich, Oslo

Bucharest, Prague

Kiev, Vienna

Zurich Paris Barcelona, Madrid, Milan Budapest, Edinburgh, Lisbon

Amsterdam, Brussels, Copenhagen, Dublin

Logistics

Moscow Berlin, Hamburg

Helsinki, Munich, Oslo, Prague

Geneva, Stockholm Warsaw Frankfurt, Kiev

Zurich Barcelona, Bucharest, Dublin, Lisbon, Madrid Amsterdam, Budapest, Copenhagen, Edinburgh, Milan, Vienna

Brussels, London, Paris

Shopping centres Berlin

Paris

Geneva, Hamburg, Moscow, Warsaw Frankfurt, Kiev

Barcelona, Madrid, Zurich

Brussels, Helsinki, Munich, Oslo, Prague

Dublin, Lisbon

Vienna

Stockholm

Amsterdam, Bucharest, Budapest, Copenhagen, Edinburgh

London, Milan

The Knight Frank wave depicts the current position of selected European centres with respect to their local prime rental cycle. As demand swells relative to supply and rents rise, centres move towards the crest of the wave. As demand ebbs and rental levels weaken, centres start to move down the wave towards the trough.

Some markets will ride the wave more quickly than others. Similarly, some markets will tread water for periods of time or move only gently through the wave.

spring 2013

european Market Indicators

Market monitor – Spring 2013

Offices Logistics Shopping centres Retail warehousing City Prime rents Prime yields Prime rents Prime yields Prime rents Prime yields Prime rents Prime yields

(€/sq m/yr) (%) (€/sq m/yr) (%) (€/sq m/yr) (%) (€/sq m/yr) (%) 135 4 6.75 4 Amsterdam 340 4 6.25 4 85 4 7.25 4 1,000 4 5.50 4 Barcelona 180 6 6.50 5 54 162 6 7.50 5 6 8.50 5 564 4 7.00 5 Berlin 276 150 4 6.50 4 4 4.75 6 57 4 7.25 4 1,380 4 5.00 4 Brussels 285 170 4 6.25 4 4 6.25 4 45 4 7.50 4 1,400 4 5.25 4 Bucharest 216 96 4 10.00 4 4 8.50 4 45 4 11.00 4 600 4 9.00 4 Budapest 240 4 7.25 90 4 8.00 4 4 54 4 9.00 4 960 4 7.00 4 Copenhagen 241 150 4 6.75 4 4 5.00 4 67 4 7.50 4 644 4 5.75 4 Dublin 323 5 6.75 6 65 4 9.25 6 3,000* 4 8.00 6 75 6 8.25 4 Edinburgh 355 4 6.50 395 4 6.75 5 4 92 4 7.75 4 2,236* 4 6.25 4 Frankfurt 432 4 4.75 6 75 120 4 6.50 4 4 6.75 4 1,500 4 4.75 4 Geneva 820 5 4.25 6 170 6 6.00 4 1,100 4 4.50 4 200 6 5.50 4 Hamburg 300 150 4 6.50 4 4 4.50 6 66 4 6.75 4 1,620 4 5.00 4 Helsinki 366 4 5.50 4 108 7.25 1,200 5.25 145 4 4 4 4 4 6.75 4 Kiev 319 12.50 4 55 N/A 4 4 11.00 4 819 4 12.00 4 N/A Lisbon 216 4 8.00 96 4 8.50 5 4 60 4 9.25 4 780 4 8.00 4 London 1,250 (WE) 4 / 723 (C) 4 4.00(WE) 4/ 5.00(C) 4 158 526 4 5.25 4 4 6.25 4 5,853* 4 5.25 4 Madrid 300 6 6.25 156 6 7.50 5 5 57 6 8.50 5 528 4 7.00 5 Milan 500 150 4 7.50 5 6 5.75 5 55 4 8.25 5 750 4 6.50 5 Moscow 909 4 8.50 N/A 4 106 4 11.00 4 3,100 5 9.50 4 N/A Munich 372 4.50 4 78 144 4 6.50 4 4 4 6.75 4 1,860 4 4.75 4 Oslo 528 4 5.25 4 135 150 4 6.25 4 4 6.50 4 1,000 4 5.50 4 Paris 800 6 4.50 4 53 180 4 5.75 4 4 7.25 4 1,600 4 5.00 4 Prague 246 4 6.50 4 51 120 4 7.75 4 4 8.25 4 840 4 6.25 4 Stockholm 532 4 4.50 4 121 4 6.50 4 800 4 5.00 4 224 4 6.00 4 Vienna 294 5.00 4 72 156 4 6.50 4 4 4 7.25 4 1,080 4 5.75 4 Warsaw 288 6.25 66 7.75 1,020 6.00 132 6 4 4 4 4 4 4 7.50 4 Zurich 650 3.75 6 150 250 4 5.50 4 6 4 6.00 4 1,200 4 4.50 4 Indicative prime yields, as quoted locally, based upon a hypothetical Grade A unit. Office rents are for prime city area Grade A space, 2,000 sq m. Shopping Centre rents are based on prime covered shopping malls, quoted on best position, 100 sq m units. Retail Warehouse rents are for units of 1-5,000 sq m located in purpose built parks. Typical Retail Warehouse schemes vary between countries. Logistics rents are for prime industrial space of units over 5,000 sq m. The data above is provided for general reference purposes only. Local market conditions will vary. *Zoned/weighted figure. Arrows provide a broad indication of recent movements and the short-term outlook for prime rents and yields. London office data is quoted for the West End (WE) and City (C) submarkets.

European weighted average prime office yield

€ per sq m per annum

%

650

7.0

600

6.5

550

6.0

500

5.5

450

5.0

400

4.5

350

4.0

2007

2008

2009

2010

2011

2012

2013

Source: Knight Frank

Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring

Figure 2

European weighted average prime office rent

Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring Summer Autumn Winter Spring

Figure 1

2007

2008

2009

2010

2011

2012

Source: Knight Frank

Figures 1 & 2 show averages of prime office rents and yields in the cities covered by this report, with markets weighted according to size and market maturity.

European Research

European Investment Team

European Valuations Team

Matthew Colbourne

Andrew Sim

Nick Powlesland

Associate, International Research

Partner, Head of European Investment

Partner, Head of European Valuations

+44 (0)20 7861 1238

+44 (0)20 7861 1193

+44 (0)20 7861 1283

matthew.colbourne@knightfrank.com

andrew.sim@knightfrank.com

nick.powlesland@knightfrank.com

www.KnightFrank.com Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934.

Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.

2013