CRE is Bad Over There, Too (Zacks.com)
Thu, 11 Jun 2009 20:26:19 Etc/GM
Jones Lang LaSalle (NYSE: JLL - News) tracks many large European markets, and the current trends are dismal. According to JLL, overall transaction volumes in Europe dropped 54% in 2008 vs. 2007. We don't yet have 2009 numbers, but volumes will continue to drop this year due in part to difficulty financing large projects and the lack of buyers.
Many buyers are waiting for prices to come down to reflect new economic realities, and sellers are reluctant to sell at discounted prices.
JLL's latest European Office analysis from 1Q09 shows a major downward trend in office fundamentals throughout Europe and Russia. Office leasing is a good gauge of the overall health of a region's economy. Rents and occupancies are dropping in most of the 24 major European markets that the company tracks. According to the survey, prime rents in Europe dropped 11.1% in 1Q09 vs. the year earlier quarter.
Large y/y declines in major markets were in Moscow, London Westend, Warsaw and St. Petersburg, where prime rents were down 41.2%, 34.8%, 24.2%, and 25.7% respectively in 1Q09 vs. 1Q08. Sequentially, rents in Europe dropped 8% vs. 4Q08.
According to the report, overall leasing volumes in 1Q09 were 40% lower than the year-earlier quarter and 37% lower than 4Q08. Most major European markets reported much lower leasing volumes compared to 1Q08. Overall European vacancy rates increased to 8.5%, up from 7.1% in 1Q08.
Read the full analyst report on JLL
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source: http://biz.yahoo.com/zacks/090611/21007.html?.v=1