DNA of Real Estate: Q4 2018

Nigel Almond

Head of Data Analytics

Phone +44 203 296 2328

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DNA of Real Estate Q4 2018 graphic banner

The DNA of Real Estate tracks prime rents and yields across 46 key office, logistics and high street destinations within Europe. The commercial real estate markets maintained their positive trend across most markets and property types during Q4 2018.

Highlights:

  • Rental growth is accelerating across Europe with further yield compression
  • Annualised European logistics rents grew to its highest rate in over a decade
  • However, retail yields set to move out in over 40% of markets with nil or negative rental growth in 2019

Offices

European office rents continued to grow in Q4 2018 by 0.7% (+2.6% y-o-y). No rental decrease was recorded in any of the markets tracked. Furthermore, 15 out of the 47 monitored markets had some level of rental growth in Q4, led by Glasgow (+6.7%), Barcelona (+3.9%) and Brussels (+3.3%).

Logistics

Logistics rents across Europe continued their upwards trend rising 0.9% over Q4 2018 and up a stronger 2.3% over the year. Close to half of the 46 markets tracked registered growth over the course of the year, although growth was recorded in fewer markets in Q4; primarily Dublin (+5.3%), London (+3.3%), Moscow (+2.9%) and Budapest (2.4%).

High Street Retail

European high street retail rental growth remains subdued, falling 0.1% over the quarter, but largely stable over the year. Rents were stable in over 80% of markets tracked in Q4, with growth limited to a handful of markets in CEE (Budapest +7.1% and Sofia +4.0%), semi-core (Rome +4.3% and Barcelona +1.8%) and in the UK (Leeds 2.0% and Manchester 1.8%).

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