(PRWeb UK) March 17, 2010
With the return of economic growth across most of Europe, industrial occupier markets will stage a modest recovery this year. Investment markets should also deliver improved performance, despite the fragility of occupier markets.
King Sturge warns that investor demand will stay focused on prime assets; but with a scarcity of suitable stock investors are already showing signs of compromising on lease length or covenant, if not on location. Secondary properties look set for another difficult year.
The investment tap is on, but only just
Appetite for industrial product entering 2010 has begun to improve, especially for larger logistics facilities and portfolios. However, there remains a lack of available good quality product coming to the market.
King Sturge predicts that pent up demand and a continuing lack of adequate product, could drive prime yields lower in the first half of 2010 in a number of European markets, although occupational markets will remain precarious.
2010: a difficult year for the occupier
Demand in 2010 is likely to come from the sectors and occupiers that proved the most resilient in 2009 even though last year demand was skewed towards smaller unit sizes. The food industry, the discount retailing sector and logistics providers are some of the most active occupiers.
In addition demand for space to service internet shopping will continue to be another growth area across Europe, as consumers seek out the convenience and cost advantages of e-retailing.
A moving decade ahead for freight
The low point for air and sea freight volumes has now been passed but it will take some years to return to normal levels. There is port capacity on track to be delivered in the next 5-10 years (in Rotterdam, Hamburg, London) that will certainly be required as the decade proceeds, in order to service the growing consumer base of an enlarging European Union. In addition many airports are expanding, particularly in the CEE.
Both trends will influence freight flows and therefore the potential locations of warehouse facilities.
King Sturge is releasing the 9th edition of its European Industrial Property Markets report which reviews the recent activity and assesses the prospects for industrial and distribution property markets across Europe in 2010 and beyond. The survey includes an in-depth analysis of the rents, yields and prospects of 24 key European markets.
To download the full report got to: http://viewer.zmags.com/publication/d548a52b
Notes to Editor:
King Sturge is one of the largest international property consultancies in Europe with 42 owned offices in 14 European countries, forming part of a network of over 215 wholly owned, associated and affiliated offices in 47 countries worldwide. Over 3,800 staff throughout these offices cover all property sectors and specialisms including plant and machinery, and residential.
In Europe, King Sturge operates in the major UK commercial centres and principal mainland European cities. In Asia Pacific, the firm has associations in Australia, Indonesia, Malaysia and New Zealand. In the Americas, King Sturge has business partners in North, Central and South America through King Sturge CORFAC International and ChainLinks Retail Advisors.
Through a joint venture with a wealth manager, King Sturge now has a presence in the Middle East. The office will initially be based in Dubai, concentrating on states in the Gulf Corporation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Embargoed until Tuesday 16th March – 8.00am GMT