Discount and value retailers are expected to remain the focus for 2009 throughout the Eurozone as consumer and business sentiment indicators remain low.
With a 1.4% drop in retail trade over the past 12 months this decline is starting to be reflected in marginal rental falls, according to international property advisor Savills.
The annual retail report shows both shopping centre and retail warehousing rents have started falling since the end of 2008, mainly in markets that have experienced strong growth in recent years such as London, Istanbul, Barcelona and Madrid. Prime rents are on average approximately 6% lower compared to 12 months ago. Paris, Brussels, Amsterdam, Milan, Lisbon and Oslo are all showing relative stability however secondary markets are anticipated to be under pressure.
Eri Mitsostergiou, associate director of Savills European research, says: “The market is adapting to changing consumer behaviour, with retailers reviewing their business strategies, developers delaying new construction and investors attaching higher risk premium to retail investments. We believe that negative rental and capital value growth will ease in most markets until the end of the year for the prime segment of the market.”