Continuing from Eastern Europe, in Part 1
In a recent interview with Solly Assa, the developer revealed the rents in the Western European main pedestrian zone primarily increased by 4.4%, while rents for office space increased by 2.8%. Rents for industrial (or logistical) centers also increased annually by 1%. The yield on the property market in western European countries decreased by 46 percentage points to 5.08%. London, Zurich, Geneva, Milan, Oslo, Paris, and Vienna are the cities with the highest rents for commercial space and have positive projections for the coming period.
The main pedestrian zones also grew. Mr. Assa pointed that major retail hubs such as London, Zurich, Paris and Vienna remain the cities with the highest level of rents on the main pedestrian zones, with the outlook remains primacy in the future.
Linked to the performance of the market of commercial (and subsequently office) space, the following cities are absolute winners:
- Vilnius, Milan and Stockholm in terms of growth in the level of rent (6% annually)
- Berlin, Barcelona and Vienna in terms of compression rate of return (a decrease of 50 percentage points per year)
- Berlin, Stockholm and Barcelona in terms of market capitalization growth (an increase of 10% per year)
Linked to the performance of the market main pedestrian zones, the following cities are absolute winners:
- Barcelona, Paris and London in terms of growth in the level of rent (over 6% per year)
- Milan, Rome and Florence in terms of compression rate of return (a decrease of 50 percentage points per year)
- Milan, Rome and Barcelona in terms of growth in the capital value (an increase of over 10% per year)
Linked to the performance of the market for industrial (logistics) centers, these cities are absolute winners:
- Hasselt, Barcelona and Brasov in terms of growth in the level of rent (over 6% annually)
- Tilburg, Venlo and Rotterdam in terms of compression rate of return (a decrease of 50 percentage points on an annual basis)
- Rotterdam, Tilburg and Hasselt in terms of growth in the capital value (an increase of over 5% per annum)
Real estate in New York was relatively stable, at least that is what Mr. Solly Assa and his company Assa Properties are assuring the general population. They base their claim on the fact that the rate of return on the main pedestrian zones and commercial space has remained at 9.25%, while the industrial segment in the amount of 13%.
In terms of the level of rents in the market for office space, an increase of 3.7% annually, while rents on the main pedestrian areas decreased by 14.3%. Major changes were observed in the level of rents on the industrial market segment.
The rate of return in the business space (and commercial offices space) compared with the rate of return in some major European cities in Western Europe, such as London (3.2%),
Vienna (4.3%), Paris (3.25%), showing that investments in real estate in New York about 2.5-3 times riskier than similar investments in these European cities.
However, the rate of return of the business (office) market segment of real estate is very close to the rate of return in some European cities such as Sofia (8.5%), Bucharest (7.5%) and Budapest (7%), and lower than the rates of return in Moscow (10.5%) and Kiev (13.5).
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