DTZ forecasts prime rents in Europe to increase

Karine Woodford, Global Head of Occupier Research, said: “Our new DTZ Rental Wave identifies markets in different stages of the rental cycle according to rent changes in the last six months. Our analysis shows that now is a favourable time for tenants to re-negotiate existing leases in nine out of 34 European markets covered in this report.  Tenants in these markets should also consider locking in longer than normal lease terms in order to avoid re-negotiation in the upward cycle stage.”
Markets where tenants should be re-negotiating leases include Budapest and Prague, where rents have remained stable for the past two years. The German markets of Hamburg and Munich are similarly placed although Hamburg is a more volatile market and presents less predictable rental movements. The same is true of Barcelona and Dublin. By contrast, some major European markets including London and Moscow are displaying current or impending rental rises. 
As a result of ongoing tension across the Eurozone and weak economic growth, overall corporate activity remained subdued across Europe in the first half of the year.  Madrid, Milan and Kyiv recorded decreases in rents. However, solid economic growth pushed up rental values in the Nordic markets.
“As the more traditional European markets struggle to attract occupiers, the fast expanding emerging markets, such as Bucharest, are witnessing rent rises on the back of strong economic growth and robust occupier demand. Countries in CEE are forecast to see relatively solid GDP growth of 3.8% between 2012 and 2016,” added Karine Woodford.