Global real estate advisor, CBRE, noted that, while demand and rents for industrial space are expected to be broadly flat through 2013, requirements to support multichannel retail strategies is a bright spot.
Both occupational and investment markets in Europe will continue to show a marked north/south divide, with core locations in the north expected to record stability, or even price rises, for prime assets.
CBRE noted that European property markets faced a difficult economic environment in 2012, with heightened fears of a euro break up in the first half and output flat or falling across almost all the continent by the year end.
This year has started more positively, with the threat of euro disintegration receding, together with encouraging news from China and the US, underpinning some signs of improvement in market sentiment and business confidence.
However, CBRE remains cautious over the impact this will have on occupier and investment markets in the short term, with better quality secondary assets in stronger locations the most likely beneficiary of improved sentiment.
The heightened polarisation between prime and secondary property was a major theme of 2012 and a key question for 2013 is whether this will ease. A greater appetite for property risk would improve this situation, but the availability of new debt for secondary is unlikely to improve much, if at all, in the coming year, meaning the outlook for these assets hinges on the economic fortunes of the region.
Nevertheless, improved prospects for better quality secondary assets in stronger markets, which began to attract more interest in late 2012, look set to continue in 2013.
Neil Blake, head of UK and EMEA research, CBRE commented: “Economic forecasts still point to a difficult year ahead, but much of the downside, principally fears around a eurozone break-up, has diminished.
“Market confidence is all important. If the trend of positive indicators persists, we expect to see improved economic growth and property market conditions, but we may have to wait until 2014 for signs of significant progress.”
