In the latest study by AWE, analysts suggest a positive development for user markets in Europe with an extraordinary growth in Eastern Europe. Especially retail markets are predicted to grow by a binary relative number in the sector of e-commerce, which marks the most impactful change in consumer behaviour. Countries like Poland and Czech Republic have a notably high growth (between ten and twelve percent), while the UK reaches – aside from its high growth between nine and ten percent – the highest share of total revenue in 2016 (between 14 and 16 percent).
While the relation between retail spaces per capita and sales are below average in these countries (900 – 1.200 m² at two till four euro sales revenue per m²), a lesser positive potential is expected for countries like Austria, Germany and Denmark (1.300 – 1.500 m² at 3,5 till five euro sales per m²). Average rental growth in major European cities until 2022 lie at an average of two percent. Remarkable is an almost doubled growth of shopping mall rents in cities like Munich and Frankfurt in comparison to high street rents. Only Berlin experiences a reversed development: While rents for retailers in popular areas grow by almost one percent, there is practically no growth in shopping mall rents.
On the office market, the ratio between available space (in million m²) and floor-space turnover (per million m²) between 2009 and mid-2017 almost halved from 3,3 to 1,7. It is apparent that at this point, floor-space turnover became more dependent on technological than financial factors. Again, markets in middle and Eastern Europe gain the most new offers in the next three years. Rental costs for office markets rise by 1,3 percent until 2022. Cities like Berlin, Oslo, Madrid and London West End can expect the strongest growth in this department (between 3,5 and four percent).
Increased consumer spending in online trade raises floor-space turnover for E-Commerce and third party logistics providers, which makes 2017 a new record-year, according to AEW. Due to their continuous growth since 2009, Middle and Eastern Europe catch up more and more. Germany has the lowest vacancy rates in logistics (around four percent) and prepares the least new spaces (two till four percent). Only Poland (12 – 14 percent) and Czech Republic (4,5 – eight percent) prepare more spaces. The highest vacancy rates can be seen in the UK (eight till nine percent), which should be compromised by the above average economic growth – and therefore growth in demand – in the coming years.
Contrary to common developments, logistic rents in Middle and Eastern Europe are predicted to decline slightly until 2022. Generally, Europe can expect an average rental growth of 1,1 percent.
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