MARKETVIEW EMEA Retail MarketView, Q2 2016 EMEA Prime …news.cbre.eu › download › 231784 ›...

© 2016, CBRE Ltd Q2 2016 CBRE Research 1

MARKETVIEW

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• BOTH PRIME HIGH STREET AND SHOPPING CENTRES SEE POSITIVE BUT SLOWING RENTAL GROWTH IN Q2

The CBRE EMEA Prime High Street rent index grew by 1.81% q-o-q and 6.89 % y-o-y, however there has been a

slowing of these growth rates compared to the 2.1% growth we saw in Q1. It’s a similar story with the Prime

Shopping Centre index as it grew by 0.36% q-o-q and 2.28% y-o-y in Q2 slower than the 0.65% growth we saw in

Q1.

• CONSUMER CONFIDENCE STABILISES IN Q2

Consumer confidence has started to recover in Q2 from the downward trend we saw in Q1. In the second quarter of

2016 consumer confidence improved moving from -7.3pts to -5.7pts. Although consumer confidence has improved

and is significantly above its long term average, greater uncertainty in the second half of the year may impact

consumer confidence going into Q3.

• RETAIL INVESTMENT TOTALLED €12.8 BILLION IN Q2

The UK remains the key target for European retail investment, followed by Germany; Europe’s second largest

market. Regional centres led the market as assets in core markets are in short supply. The gap between prime and

secondary yields remains wide as investors continue to play a risk-adverse strategy.

EMEA Retail MarketView, Q2 2016

EMEA Prime retail rental

growth starts to slow in Q2

Cover page 1:

Two column text and horizontal graph/image

1.81% -4 bps

Source: CBRE Research Q2 2016

Chart 1: EMEA Prime Retail Rent Index

0.36% -5 bps

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0

100

200

300

400

500

600

Q4

20

06

Q1

20

07

Q2

20

07

Q3

20

07

Q4

20

07

Q1

20

08

Q2

20

08

Q3

20

08

Q4

20

08

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

09

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

10

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

11

Q1

20

12

Q2

20

12

Q3

20

12

Q4

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12

Q1

20

13

Q2

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13

Q3

20

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Q4

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13

Q1

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14

Q2

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Q3

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Q4

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14

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

15

Q1

20

16

Q2

20

16

% Change pa SC % Change pa HS Shopping Centre Index High Street Index


MARKETVIEW

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EMEA RETAIL

SLOWING ECONOMIC GROWTH, WHILST

CONSUMER CONFIDENCE GROWS SLIGHTLY.

Inner page 2:

Two column text and vertical graph/image

Source: Eurostat Q2 2016

Chart 2: GDP Growth 2016 (%) - Forecast

-2

-1

0

1

2

3

4

5

Irel

and

Rom

ania

Swed

en

Turk

ey

Slova

kia

Lith

uania

Spain

Latv

ia

Bulg

aria

Pola

nd

Cze

ch R

epublic

Est

onia

Euro

pea

n U

nio

n (2

8)

UK

France

Neth

erla

nds

Ger

many

Cro

atia

Bel

giu

m

Aust

ria

Denm

ark

Hungary

Portugal

Italy

Switz

erla

nd

Finla

nd

Norw

ay

(main

land)

Russ

ia

Gre

ece

0

5

10

15

20

25

30

Gre

ece

Spain

Cro

atia

Portugal

Italy

Slova

kia

Turk

ey

France

Latv

ia

Finla

nd

Europe…

Bel

giu

m

Lith

uania

Irel

and

Bulg

aria

Swed

en

Rom

ania

Netherl…

Pola

nd

Russ

ia

Denm

ark

Aust

ria

Hungary

Est

onia UK

Switzerl…

Norw

ay

Czech…

Ger

many

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Pola

nd

Rom

ania

Lith

uania

Unite

d K

ingdom

Hungary

Bulg

aria

Slova

kia

Swed

en

Bel

giu

m

Est

onia

EU

28

Irel

and

Slove

nia

Denm

ark

Latv

ia

Aust

ria

Norw

ay

France

Finla

nd

Ger

many

Serb

ia

Luxe

mbourg

Switz

erla

nd

Portugal

Malta

Chart 3: Unemployment Rates 2016 (%) -Forecast

Chart 5: Volume of Retail Trade Growth (%) Q2 2016 seasonally adjusted (q-on-q)

Source: Oxford Economics Q2 2016

Source: Oxford Economics Q2 2016

-10

-5

0

5

Jun-1

4

Aug-1

4

Oct

-14

Dec-

14

Feb

-15

Apr-

15

Jun-1

5

Aug-1

5

Oct

-15

Dec-

15

Feb

-16

Apr-

16

Jun-1

6

Chart 4: EU Consumer Confidence Balance

Source: Macrobond June 2016


MARKETVIEW

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Q3

2015

Q4

2015

Q1

2016

Q2

2016

Index – High Streets (Q1 1986 = 100)

499 508 518 528

Index – Shopping Centres

(Q1 2003 = 100) 186 188 189 190

Quarter-on-Quarter

(% Change) -High Streets 1.0% 1.8% 2.1% 1.8%

Quarter-on-Quarter

(% Change) – Shopping Centres 0.3% 0.9% 0.6% 0.4%

4.00

5.00

6.00

7.00

Dec-

04

Jun-0

5D

ec-

05

Jun-0

6D

ec-

06

Jun-0

7D

ec-

07

Jun-0

8D

ec-

08

Jun-0

9D

ec-

09

Jun-1

0D

ec-

10

Jun-1

1D

ec-

11

Jun-1

2D

ec-

12

Jun-1

3D

ec-

13

Jun-1

4D

ec-

14

Jun-1

5D

ec-

15

Jun-1

6

EMEA SHOPPING CENTRE EMEA HIGH STREET

EMEA RETAIL

RENTS & PRICING

DEVELOPMENT

Inner page 2:

Two column text and vertical graph/image


Q3

2015

Q4

2015

Q1

2016

Q2

2016

EMEA HS Weighted Average Yield(%) 4.35 4.22 4.17 4.13

Quarter-on-quarter Shift (bp) -7 -13 -5 -4

Year-on-year Shift (bp) -40 -46 -38 -29

EMEA SC Average Prime Yield (%)

5.13 5.03 5.01 4.96

Quarter-on-quarter Shift (bp) -13 -10 -2 -5

Year-on-year Shift (bp) -41 -48 -39 -30

Chart 6:Average Prime Yield (%)


Table 1: EMEA Prime Retail Rent Index

Table 2 :Average Prime Yield Index



MARKETVIEW

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EMEA RETAIL

INVESTMENT MARKETS

SOURCES OF INVESTMENT

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

0.0

5.0

10.0

15.0

20.0

2008

.1

2008

.4

2009

.3

2010

.2

2011

.1

2011

.4

2012

.3

2013

.2

2014

.1

2014

.4

2015

.3

2016

.2

Quarterly Total (LHS) Rolling 12 Mo.Total (RHS)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

UK

Germ

any

CEE

Oth

er*

Nord

ics

Fra

nce

Spain

Benelu

x

Italy

Q1 2015 Q2 2015 Q3 2015

Q4 2015 Q1 2016 Q2 2016

Figure 8: Retail Investment by Market / Region, (€ billion)

11%

19%

17%

13%

4%

12%

7%

8%

9%

Institutional Fund

Property Company(Listed/REIT)

Property Company(Other)

German Funds

UK Funds

US Funds

All Other CollectiveVehicles

Private

Other

Figure 9: Buyer Mix by Value (%), Q2 2016

Figure 7: European Retail Investment (€ billion)





MARKETVIEW

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EMEA RETAIL

OUTLOOK

•

•

•

42% 31%

25%

37% 32%

34% 39%

40%

38% 49%

32%

48%

29%

33%

46%

45%

46% 36% 40%

48% 49%

49% 42%

50%

46%

44%

0

2

4

6

8

10

12

14

16

18

20

Q1 2

01

0

Q3 2

01

0

Q1 2

01

1

Q3 2

01

1

Q1 2

01

2

Q3 2

01

2

Q1 2

01

3

Q3 2

01

3

Q1 2

01

4

Q3 2

01

4

Q1 2

01

5

Q3 2

01

5

Q1 2

01

6

Cross-border Purchasers

Local Purchasers

Figure 10: Investment in European Retail by Investor Domicile, (€ billion)

Figure 11: Eurozone Prime High Street Retail and Bond Yields

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

-1

0

1

2

3

4

5

6

Dec-

07

Jun-0

8

Dec-

08

Jun-0

9

Dec-

09

Jun-1

0

Dec-

10

Jun-1

1

Dec-

11

Jun-1

2

Dec-

12

Jun-1

3

Dec-

13

Jun-1

4

Dec-

14

Jun-1

5

Dec-

15

Jun-1

6

Basi

s Po

ints

Spread (rhs)

Shops - Prime (lhs)

10 year German Bund Yield (LHS)

•

•

•

•

Figure 12: Eurozone High Street Retail - Prime and Secondary Yields

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

3

4

5

6

7

8

9

Dec-

07

Jun-0

8

Dec-

08

Jun-0

9

Dec-

09

Jun-1

0

Dec-

10

Jun-1

1

Dec-

11

Jun-1

2

Dec-

12

Jun-1

3

Dec-

13

Jun-1

4

Dec-

14

Jun-1

5

Dec-

15

Jun-1

6

Basi

s Po

ints

Spread (rhs) Shops - Prime (lhs)

Shops - Secondary (lhs)

CBRE Ltd confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we

have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness.

This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written

permission of CBRE.

MARKETVIEW

Closing page 2:

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MARKETVIEW EMEA Retail MarketView, Q2 2016 EMEA Prime …news.cbre.eu › download › 231784 ›...

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