CB Richard Ellis named ‘World’s Best’ Consultancy at International Property Awards
CB Richard Ellis Group, Inc. (CBRE) has been named the “Best International Property Consultancy” of 2010 at the International Property Awards, announced in London on 27 November 2010. The event, held in association with Bloomberg Television and the New York Times, is one of the foremost property award competitions in the world, having existed for more than 15 years.
CBRE was selected for this “world’s best” award over other top-scoring regional winners from Europe, Africa, Asia Pacific, Arabia and the Americas. CBRE was also the winner of the “Best Commercial Property Consultancy” award for London, qualifying the company for consideration in the overall international award. The International Property Awards were determined by an independent panel of judges.
Brett White, Chief Executive Officer of CB Richard Ellis, said: “Winning this highly coveted award is a strong endorsement of our people and platform as well as our ability to develop innovative solutions that enable our clients to succeed throughout market cycles.”
Mike Strong, Chairman & CEO of CBRE’s EMEA operations, added: “Today more than ever, large multinationals choose property advisors who not only have a proven international track record but can also think innovatively and differently. Our constant objective is to continue to evolve and improve the service we deliver to clients – winning these awards gives us additional confidence that we’re fulfilling that critical aim.”
This year’s judging panel included: Google UK’s industry head property markets; group chief executive of the National Federation of Property Professionals; president elect of International Real Estate Federation FIABCI; International Consortium of Real Estate Agents Association (ICREA); chairman of the Australia Institute of Architects; editor-in-chief of International Homes Luxury Collection magazine; and CEO of the German Real Estate Association.
London (West End) remains world’s most expensive office market;Hong Kong (cbd) second; Tokyo Inner Central third
London’s West End continues to be the world’s most expensive office market, according to CB Richard Ellis Group, Inc. (CBRE) Global Research and Consulting’s semi-annual Global Office Rents survey. Hong Kong’s Central Business District (CBD) continued in second place and also recorded the fastest year-over-year occupancy cost rise with a 34.2% increase. Tokyo’s Inner Central remained the third most expensive market for office space. Mumbai held its fourth place position on the list while Moscow remains fifth in the CBRE rankings, which track occupancy costs for prime office space in 175 cities around the globe.
CBRE reports first positive capital returns in Continental European real estate market this cycle
CBRE’s European Valuation Monitor sees values stabilising further in Q2 2010
Continental European capital values recorded their first positive change of this cycle in the second quarter (Q2) of 2010, according to CB Richard Ellis’ (CBRE) latest European Valuation Monitor. After nine consecutive quarters of decline, growth of 0.3 per cent was recorded, with the Nordics and France leading the monitor higher (by recording 2.3 per cent and 1.4 per cent quarterly capital growth respectively). Evidence of stabilisation was also apparent in the other European regions, where the pace of capital value decline moderated further following Q1 2010 improvements.
Whilst the UK again posted the strongest quarterly growth in Europe of 2.3 per cent in Q2, this was its weakest performance since Q3 2009 (2.0 per cent), as reflected in CBRE’s UK Monthly Index for July. Including the UK in the pan-European figures, capital growth was 0.7 per cent across Europe in Q2.
The retail sector has shown the best performance each quarter over the past year for both pan-European and ex-UK capital values and has outperformed the industrial and offices sectors. The European office sector (excluding the UK) saw its first positive result of the cycle in Q2, although it still lags the other sectors in terms of year-on-year performance.
CBRE's Q2 EMEA Rents and Yields Indices showed small reductions in prime yields across all sectors, with office rents edging up in an otherwise broadly stable European real estate market. With an uncertain economic outlook and limited prospects for rental growth in the short term, investors have focused on the core western markets of France and Germany along with the Nordic region, particularly Sweden.
Richard Holberton, Director, EMEA Research, CB Richard Ellis, commented: “The first positive value movement in the continental European real estate market reflects the growing trend towards prime yield stabilisation, and in some cases falls, across all sectors. In overall terms, the relatively modest recovery in values is consistent with what we would expect given the slow economic recovery and the concentration of investor interest at the prime end of the market.”
The CBRE European Valuation Monitor showed:
• All Property pan-Europe capital growth was 0.7% in Q2, with annual growth also 0.7%.
• All Property ex-UK Europe capital growth was positive for the first time this cycle: 0.3% in Q2, although values were still 3.1% lower than a year ago.
• The strongest performing market region over the quarter was the UK, which recorded capital growth of 2.3%. The Nordic region led the non-UK markets for the quarter with 2.1% growth, followed by France with 1.4%.
• Retail was the best performing sector over both the quarter and year, with 1.0% and 2.0% capital growth respectively on a pan-Europe basis.
The CBRE European Valuation Monitor is based on quarterly fund valuations carried out by CBRE and designed to enhance transparency by providing a general indication of patterns of value change in the European property market. This is the third report in the series since it was launched in Q4 2009.
Asia Pacific continues to lead global office rent rebound
EMEA region follows closely, with rents turning up
More than half of the office rental markets in Asia Pacific either stabilized or moved into the growth phase during the second quarter (Q2) of 2010, demonstrating that the region continues to lead the global real estate recovery, according to CB Richard Ellis’ (CBRE) latest quarterly Global Office Rental Cycle report.
Globally, cities in all regions generally moved forward in the global rental cycle during the quarter, with office demand remaining stable or improving in most locations. The financial and corporate sectors have boosted demand for office space in Asia and Europe, supported by growth in private demand and employment stabilization in mature economies during the past quarter.
CBRE: Prime yields edge downwards in EMEA property markets in Q3 2010
Latest data shows contrasting upward yield shift in UK regional office market
Yields from prime commercial real estate in Europe, Middle East and Africa (EMEA) continued to edge downwards in the third quarter (Q3) of 2010, falling by up to 11 basis points across the office, retail and industrial sectors, representing a slightly larger fall than in Q2 2010, according to CB Richard Ellis’ latest EMEA Rents and Yields Indices. There was relatively little change in prime rents across the key European markets during the quarter.
Richard Holberton, Director of EMEA Research, CBRE, said: “This quarter’s changes reinforce the offset in the timings of the rental and capital markets cycles. While prime rents in many markets have now stabilised, there is an absence of widespread upward momentum. This is one of the factors now tempering the downward movement of yields. Perhaps more importantly, following significant repricing in the second half of last year, many investors paused over the summer period to assess the market in light of the possible impact of government austerity measures.”
CBRE instructed on Europe’s largest straw bale community development
The Building Consultancy team at CB Richard Ellis (CBRE) in Leeds has been instructed to project manage the construction of an innovative £4M eco-friendly Enterprise Centre in Bradford which will be the largest straw bale community development in Europe.
Newlands Community Association initially approached CBRE to advise on repair work to its existing facility, located within a 1950’s school building. The expert team advised that the most cost-effective solution would be to locate from the existing redundant premises to a new facility and subsequently the Association was awarded planning permission to develop a new community centre on a 3.5 acre brownfield site in the Eccleshill area of Bradford.
Funding for the scheme comprises £1.019 from the European Regional Development Fund, £1M from the Communitybuilders fund and £990,000 from Bradford Council’s Government-funded Local Enterprise Growth Initiative in addition to a £1M mortgage from the Charity Bank.
A full design and project team is currently being appointed by CBRE with work scheduled to start on site in January 2011 developing a 2 storey 15,000sq ft Enterprise Centre and an additional 15,370 sq ft building incorporating 14 units of managed workspace with flexible leases. Both buildings, which will be constructed from bales of straw, are scheduled to open towards the end of next year.
CBRE has already assisted the Association with developing plans for the new centre in terms of costings, architecture, sustainable construction and in securing funding and will now manage the entire progress from start to completion.
Nick Twigg, Associate Director of Building Consultancy at CBRE, said; “The Enterprise Centre is an incredibly exciting project and is intended to set the benchmark for sustainable community development in Europe. In addition to the straw bale construction, key features of the BREEAM ‘Excellent’ rated development will be ground source heat pumps, a canopy constructed from photovoltaic cells, recycled carpet floor coverings and gluelam beams to name a few. The project represents a major investment into an area of Bradford which is prime for regeneration and the result will be a fantastic new centre for the community to benefit from and also an exemplar ‘green’ development.”
Tony Holdich, Business Manager for Newlands Community Association, continues; “When we were advised by CBRE that our existing facility was unfit for use we wanted to really push the boundaries of design and build to create a centre of Excellence.
“Bradford is a truly transformational city and it is projects such as this that will ensure it achieves its long-term regeneration goals. We are delighted to have secured the funding to facilitate this groundbreaking development and are looking forward to seeing work progress on the new facility.”
Global investor demand and rents recovering for industrial property
Industrial markets across the globe are now in recovery mode, albeit at very different stages, with Asia leading the rental recovery according to a new MarketView report from CB Richard Ellis Group, Inc. (CBRE). All regions witnessed increases in investment spend in the first half of 2010, with appetite strongest across Europe, the Middle East and Africa (EMEA), where industrial sales increased by 90% on 2009 levels, with this pace set to continue into 2011.
CBRE’s first global analysis of both the occupational and investor aspects of the industrial logistics sector, shows that Tokyo has emerged as the most expensive location in the world for distribution/logistics centres, followed by London and Sao Paulo in Brazil.
Nissan Selects CB Richard Ellis as European Strategic Property Advisor
CB Richard Ellis Group, Inc. (NYSE: CBG) today announced that it has been selected by Nissan Europe S.A.S as its strategic property advisor for the region.
The European contract win marks an important expansion of Nissan’s relationship with CBRE in North America, where CBRE have been engaged as a full-service real estate partner since July 2007. The European contract, primarily comprising transaction and consultancy support, is the first of its kind awarded by Nissan across the European region. The contract reflects the continued growth and success of CBRE’s Corporate Services business in Europe, where earlier this year it announced other programmes with Europe-based corporates including StatoilHydro and France Telecom.
Mark Steele, General Manager G&A Controller at Nissan in Europe, said: “The appointment of CBRE is an important step in the development of our integrated global business support infrastructure. In a climate where operational efficiency is vital to success, we are committed to driving the performance of our property portfolio, taking full advantage of favorable property market conditions and maximising the value from our existing assets.”
Matthew Pullen, Head of CBRE Global Corporate Services, EMEA, said: “The expansion of our global relationship with Nissan represents a great vote of confidence in CBRE’s operating platform and worldwide corporate services capability. Current market conditions represent a significant opportunity for occupiers to reduce their exposure to real estate risk and cost through leveraging a unique set of property market dynamics. Property markets globally continue to favour the occupier with falling rents and increased vacancy in many markets.”
Nissan was founded in December 1932, and is among the top three Japanese automakers. As at 31 March 2008, Nissan’s global sales volume was 3.7 million units, equating to total net sales of 10,824.2 billion yen, and employed (on a consolidated basis) in excess of 180,000 employees.
New York Still World’s Most Expensive Retail Market Despite Rental Falls
Prime retail rents have fallen in almost every region across the world as the global recession impacts consumer sentiment and retail sales, according to new retail research from CB Richard Ellis (CBRE), Global Retail MarketView.
Demand for retail space has declined in most markets across the world as consumers cut back on spending and unemployment continues to rise in many countries. Emerging and less established markets have been most significantly affected. Buenos Aires saw the largest annual decline in retail rents year-on-year with a drop of 37%, followed by Warsaw with a 33% decline and Washington DC with a 26% decline. Whilst some markets have continued to experience year-on-year increases in retail rents, in many cases the current pressure is downward.
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Rising Public Debt Encouraging Sales of Government Property Assets
Rising public debt levels in response to the global banking crisis and recession appear to be encouraging a new wave of government property sales across Europe, according to new research from CB Richard Ellis (CBRE). CBRE has today released a new report, Governments Turn to Property Sales?, which considers the scope for sales of government property and reviews asset disposal plans in a number of major markets including France, Germany, Greece and the UK.
The report follows the announcement by the UK Government that it is to sell up to £20 billion of commercial property and related assets during the next 10 years while generating a further £5 billion in annual operating cost savings. With other governments also developing similar plans, the report analyses the investor appeal of such assets in the current market and considers the potential for these dispositions to become a more powerful global trend in the coming 12 months.
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Tokyo Now World’s Most Expensive Office Market. London’s West End and Moscow Ranked Second and Third Respectively
Tokyo’s Inner Central District has supplanted London’s West End as the world’s most expensive office market, according to CB Richard Ellis Group, Inc. (CBRE) Global Research and Consulting’s semi-annual Global Office Occupancy Costs survey. London’s West End is now the world’s second most expensive office market, followed by Moscow, Hong Kong’s Central Business District (CBD), and Tokyo’s Outer Central District in the CBRE report, which tracks office occupancy costs in more than 170 cities around the globe.
Global financial centres have been most significantly affected by declining occupier demand and, as one would expect, registered the most material decreases in office rents. In many cases, major global office markets have seen occupancy costs fall by 20% or more over the last 12 months. Across the 170 cities as a whole, office occupancy costs fell 2.8% over the 12-month period ending 31 March 2009 (on an un-weighted average basis) compared with an increase of 8% in the 12-month period ending September 30, 2008. Singapore had the largest year-on-year decrease in occupancy costs with a drop of 34%.
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CEE Commercial Property Investment Activity in April Beats Q1 2009 Monthly Average
Property investment turnover in Central & Eastern Europe (CEE) totaled approximately €100 million in April through a total of five transactions, according to CB Richard Ellis’ CEE Property Investment MarketView for April 2009. While this means that property investment remained low in April compared to previous years, it was about 32% higher than the monthly average for the first quarter of 2009. April’s transactions included three retail transactions along with one office and one industrial transaction. Jos Tromp, Head of CEE Research & Consulting, explains: “The core Central European markets of the Czech Republic and Poland accounted for four of the five April investment transactions and remain the most active CEE markets not only in terms of transactions closed, but also in terms of investor interest.”
Overall, April’s market performance confirms that the CEE property investment market remains slow and reflects the market’s reliance on investment by the German Open-ended Funds. The most active investor in CEE so far in 2009 has been DEKA with its acquisitions of Jungmannova Plaza in Prague and Grzybowska Park in Warsaw.
CEE markets have become more attractive to potential investors as yields have moved out across the region in recent quarters. Moreover, yields in certain Western European markets such as London, Paris and Madrid seem to be close to bottoming out, which could herald more stable yields for prime properties in CEE later this year. Tromp comments: “While further outward movement of yields from Q1 2009 levels is expected across CEE, a foundation is being laid on which property values in CEE can build.”
In the meantime, opportunistic buyers continue to express interest in the region, but this is not yet being realised in transaction levels as prices have not moved out to the extent deemed appropriate by investors. According to Pavel Schanka, Director CEE Capital Markets: “Equity rich investors are in a unique position in that they have limited competition and the opportunity to purchase top-flight buildings with strong income-generating potential that would not have come onto the market in normal circumstances. Now that yields have risen rapidly and rents are nearing sustainable levels in certain markets, CEE capital values are much more stable than they were a year ago.”
Weakening Demand Gives Tenants Scope to Negotiate in European Office Markets
With the fallout of the global economic downturn now hitting leasing markets across the world, landlords are under increasing pressure and tenants are initiating negotiations on rents and lease terms, according to the latest reports by CB Richard Ellis.
Leasing market conditions generally deteriorated over the first quarter of 2009, as sharply weaker economic activity and negative sentiment about future prospects led to a reduction in office take-up and general downward pressure on rents. The CB Richard Ellis office rent index for the EU-27 fell by 3.6% in the first quarter, with rents down by around 6.5% from their peak of last year. The quarter's decline reflects rental falls in most markets, although some key cities, such as Frankfurt and Milan, remained stable.
Vacancy levels are rising across Europe, driven upwards by a combination of weaker demand, new developments entering the market and, increasingly, occupiers looking to dispose of surplus space. Vacancy rates across the EU-27 group have risen by over a percentage point over the past year. As a result, further rental falls are expected in most major markets. However, new construction starts have virtually ceased in the region, which will constrain stock additions in the medium term. Although of little benefit in the short term, this will help rents to stabilise more quickly once some level of occupier demand returns to the market.
“Landlords are finding it increasingly difficult to lease vacant space, given the understandable caution being expressed by most occupiers at present,” commented Richard Holberton, Director, EMEA Research at CB Richard Ellis. “With those occupiers requiring space driving a hard bargain, and increasing choice available in the market, it is inevitable that we will see further weakening in rents and an increase in leasing incentives in most markets over the coming months,” Holberton added.
At the same time, changing market conditions are offering new real estate opportunities for occupiers as they too seek to cope with difficult conditions in their own markets. Companies across a broad range of sectors and geographies are experiencing weakening demand for their products and services, in many cases coupled with price deflation. Occupier behaviour is therefore largely characterised by caution, cost reduction and space rationalisation.
Driven to cut costs, occupiers are pursuing a range of new strategies to take advantage of the market. Even when they are not seeking additional space, tenants are increasingly able to negotiate with their landlords. Those who have impending lease expiries or break clauses are in a particularly strong position, as few landlords would welcome the prospect of a vacant building in the current market. Investors are focused on two factors at present: the quality and the length of their income stream. These factors determine the value of an asset, so a good tenant who offers to renew a lease is well placed to secure a rent reduction or other benefits.
However, the same pressures mean that even those who have no formal option to vacate are currently in a strong position, provided they are a good quality tenant. Occupiers are initiating discussions seeking rent reductions or rent-free allowances in exchange for lease extensions, or seeking to alter specific lease terms (such as dilapidations or reinstatement clauses) in their favour, thereby reducing liabilities they have to carry on their balance sheet.
Matthew Pullen, Head of Global Corporate Services EMEA, CB Richard Ellis, commented: “With corporate expansions scarce and asset values and investment returns falling, some office landlords are under huge pressure and the negotiating power is often in tenants’ hands in many European markets. Occupiers who have an opportunity to vacate and are actively prepared to do so are particularly well-positioned. The cost and quality of alternative accommodation available, as a greater choice of quality space enters the market, makes the threat of relocation credible to the landlord and therefore places tenants in an even stronger position.
“The ability to secure rent reductions or reduce space will depend on a wide range of factors including local market conditions, lease structures and the position and attitude of individual landlords. Yet the current market does present opportunities for occupiers who can combine awareness of real estate market conditions with an ability to influence further changes in their business cultures. Timing, market intelligence and high-quality advice are vital at this time.”
How Global is The Business of Retail in Belgrade?
The key activities pertinent to commercial real estate market and especially retail market both in Belgrade and the region have been significantly influenced by effects of global financial crisis, reflecting rent dynamics and the ratio between demand and supply. Namely, certain retail chains have temporarily suspended their further international expansion till economic and financial indicators are not more promising. Some of them have chosen franchising system to expand their businesses, thus reducing risks, costs and avoiding time-consuming bureaucratic procedures.
On the other hand, the current situation can be perceived as a chance for the companies with positive cash flow, as bold moves at this moment may guarantee larger market share in future, which would certainly be solid basis for ‘better’ times. Recent years mark ever greater interest of both local and international developers in retail developments. However, it is yet to be seen which projects shall be developed, which primarily depends on the readiness and capability of the banks to finance the announced projects.
The current size of existing modern shopping centers in Belgrade and elsewhere in Serbia still lags behind the regional trend in more developed countries of Central and Eastern Europe. According to a number of sq m of modern shopping stock, Belgrade with its 90 sq m of shopping stock per 1,000 inhabitants follows the same trend as Sofia, which is, however, considerably below the regional average of 180 sq m per 1,000 inhabitants.
When compared to other capital cities of the region, the difference is even greater, as the average of the capital cities of the region amounts to even 450 sq m per 1,000 inhabitants.
According to the same criterion, Belgrade is lagging behind Podgorica as well, which with the opening of Delta City shopping mall has 200 sq m per 1,000 inhabitants, whereas Zagreb currently holds 195,000 sq m of shopping stock which accounts for 250 sq m per 1,000 inhabitants
With regard to the official data big developers such as Big Centers, Plaza Centers, Delta, MPC, Ocean Atlantic, Pevec, Tus, TQ, Vondel Capital have not suspended any of the development projects announced; however, some of them say that the completion dates may be postponed.
With the opening of Shopping Mall Usce, the supply has been enriched with new brand names such as J. LO, Salsa, Glow, Lolipop, Prenatal, to name a few. Moreover, Delta City shopping mall as the first of the kind have attracted significant number of new international brand names, which led to the increase in the number of internationally recognised retailers present in Serbia in the past year from 14 to 17%, ranking Serbia as 47th on the global list (the research conducted by CBRE International). The highest rents in shopping centers in Belgrade have kept the same value in the range from 40 to 60 EUR per sq m, depending on the position and the size of the retail space.
In the meantime, due to the lack of available new retail space, central Belgrade shopping zone (Knez Mihailova Street, Terazije Square) still remains key retail location, especially for those retailers which enter the market for the first time. High pedestrian flow and the importance of such locations in retail sense account for low vacancy rate, whereas asking rents remain high, ranging between 80 and 120 EUR per sq m, while prime locations in Knez Mihailova Street even amount to 120+ EUR/sq m/month.
Nevertheless, what is notable in the past few months is the fact that certain number of retail units have faced tenant change due to unproportionately high monthly rents when compared to realized turnover.
The most elite locations shall certainly be the last to experience effects of global financial crisis and first to feel the benefits of economic recovery. These locations are not expected to mark further rent increase in near future nor significant fall. Should the crisis persist, the lessees will have the opportunity to ask for rent revision, lowering the current rent value even for the already signed lease agreements, which may turn the market into ‘Lessees Market”.
Rents Falling And Yields Rising Across EMEA in First Quarter 2009
CB Richard Ellis today announced the results of its Rent and Yield Indices for the first quarter of 2009, broadly reporting falling rents and rising yields across Europe.
Retailers Continue to Globalise Despite Downturn
Retailers have continued to expand their global footprint during the past 12 months, strategically developing long-term growth plans despite the global economic slowdown and a rapid weakening in sentiment, according to the latest retail research from CB Richard Ellis, the annual How Global is the Business of Retail? report. Retailers have continued not just to internationalise, but to globalise, with over 40% of all new openings during 2008 taking place outside the retailer’s home region.
Retail Property Outperforms Other Sectors in European Investment Market
CB Richard Ellis Group, Inc. today announced that European investment activity in the retail sector held up better than activity in the investment market as a whole in the first quarter (Q1) of 2009. Earlier this week, CB Richard Ellis revealed that overall investment turnover in the European market for Q1 had fallen by 44% quarter-on-quarter to €11.5 billion. In contrast, the value of retail property sales fell by just 7% - from €4.1 billion in Q4 2008 to €3.8 billion in Q1 2009.
CB Richard Ellis Reports Buoyant Year Of Activity In Data Centre Market with Green Issues Dominating The Agenda
CB Richard Ellis, the world’s leading real estate advisor, has announced that the total take-up for 2008 in the European Data Centre market was 147,380 sq m across the five tier 1 markets. This was only seven per cent down on the highest ever take-up figure reported in 2007 and was 131 per cent higher than 2006.
Andrew Jay, Head of Technology Practice Group, CB Richard Ellis, said: “The buoyant activity amongst occupiers and developers of technical real estate in Europe during the course of 2008 has defied the global economic downturn and provides strong evidence that the data centre industry has reached a maturity perhaps not previously witnessed.
UK dominates Soft European Property Investment Market in first quarter as investor interest turns to London
CB Richard Ellis Group, Inc. today announced that, as expected, the European commercial real estate investment market continued its fall with turnover for the first quarter (Q1) of 2009 totaling €11.5 billion. This level of activity marks a sharp decline from the fourth quarter (Q4) of 2008, which saw market activity of €20.6 billion, and reflects, among other things, the continuing impact of Lehman Brothers’ collapse last September on investor sentiment. Despite the sharp fall in activity, a slowing rate of decline in the UK and a pick-up in activity in several other European markets suggest investor sentiment may be starting to improve. The UK’s share of the European market increased to 37% in Q1 2009, up from 26% in Q4 2008.
CEE Property Investment slows further in Q1 2009
Recorded property investment turnover in Central and Eastern Europe (CEE) slowed further in the first quarter (Q1) of 2009 to a level of approximately €220 million, according to CB Richard Ellis. This volume represents approximately one-third of the volume transacted in Q4 2008, a slightly stronger slowdown than that experienced in the overall European investment market over the same period. Investment volumes for Q1 2009 have seen the CEE market move back to levels seen earlier in the decade, before the region experienced significant growth in property investment turnover during 2005-2007.
Currency Fluctuations Impacting CEE Property Market
Falling currencies in Central & Eastern Europe (CEE) are impacting property investors, developers and occupiers across the region, with some countries more affected than others, according to CB Richard Ellis’ forthcoming publication, CEE Currency Fluctuations ViewPoint.
Capital Values fall 41% across CEE due to falling rents and yield decompression
Capital values fell in Q1 2009 in office markets across Central & Eastern Europe (CEE) due to widespread yield decompression and falling prime rents in some markets, according to CB Richard Ellis’ CEE Offices Index MarketView report. CEE weighted prime capital values fell by 41% year-on-year (y-o-y) and 22% quarter-on-quarter (q-o-q) in Q1 2009. Declines have generally been steepest in Eastern Europe (EE), but more modest in some Central European (CE) and Southeastern European (SEE) markets. Whereas the y-o-y decline to capital values in Q4 2008 was caused entirely by yield decompression, falling prime rents in several CEE cities started negatively impacting the capital value index across the region in Q1 2009 for the first time since Q1 2005.
CB RICHARD ELLIS GROUP, INC. STRENGTHENS REGIONAL PRESENCE IN CENTRAL & EASTERN EUROPE THROUGH AFFILIATION WITH MBL
CB Richard Ellis Group, Inc. (CBRE) announced today that it has signed an affiliate agreement with MBL EOOD, a premier commercial real estate services provider in Bulgaria. The affiliation will leverage the leading capabilities of both companies by combining strong local market expertise with a global platform and client relationships.
The agreement, which will further strengthen CBRE’s presence in the Central and Eastern European (CEE) region, follows last year’s acquisition of Eurisko Consulting in Romania and affiliation with Atria Group in Greece.
LONDON, PARIS DOMINATE INVESTMENT ACTIVITY IN 2008
Despite the sharp fall in overall investment activity in commercial property in 2008, Europe’s largest cities dominated investment turnover for the year, according to new research from CB Richard Ellis. London and Paris maintained their dominance of the European office market, accounting for 36%* of all office transactions completed last year, or one in every three deals. This concentration extended to the market’s largest deals, with 44% of office deals over €100 million being done in either London or Paris.
RETAIL DEALS FEATURE STRONGLY iN 2008’S-LARGEST EUROPEAN PROPERTY TRANSACTIONS
Despite the decline in total retail investment transactions in 2008, as financing conditions remained difficult, retail deals featured prominently among Europe’s largest property transactions of last year, including two of the four European investment deals over €1 billion, according to CB Richard Ellis’ latest Retail Investment MarketView.
CB RICHARD ELLIS NAMED TO FORTUNE’S ROSTER OF REAL ESTATE INDUSTRY'S MOST ADMIRED COMPANIES
CB Richard Ellis Group, Inc. (CBRE) has been named to the annual roster of the Most Admired Companies in the U.S. real estate industry compiled by Fortune. The survey covers 64 industries and is one of the most definitive report cards on corporate reputations.
Companies are rated on a host of measures related to corporate performance. CBRE scored particularly well in people management, social responsibility and global competitiveness.
Mike Strong, Chairman of CB Richard Ellis EMEA, said: “Every day our professionals in Europe and around the world come to work focused on performing to the highest standards. Fortune’s recognition of CBRE as one of the most admired companies in our industry underscores the powerful brand that our people have built through their focus on service and value creation for our clients.”
Drawing from a base of some 1,400 companies, a total of 689 companies from 28 countries were surveyed by Fortune. Only companies that score in the top half of their industry survey were included in the Most Admired Companies roster. The attributes on which companies are measured include innovation; quality of management; people management; financial soundness; use of corporate assets; long-term investment; social responsibility; product/services quality; and global competitiveness.
NORDIC PETROLEUM COMPANY STATOILHYDRO ASA SELECTS CB RICHARD ELLIS AS NEW GLOBAL REAL ESTATE ADVISOR
In one of the most significant real estate services contracts ever to come out of Norway, CB Richard Ellis Group, Inc. (NYSE: CBG) announced today that it has been selected by StatoilHydro ASA (OSE: STL, NYSE: STO) as its preferred global real estate provider of transaction and project management services. StatoilHydro’s six million square foot global portfolio consists of over 70 properties in 40 countries.
StatoilHydro sought to establish a partnership with a global real estate advisor with a proven track record of delivering a real estate strategy that is capable of supporting the growth and expansion of its international business operations. This, coupled with CBRE’s ability to deliver a comprehensive range of real estate services on a truly global basis, were key determining factors in CBRE’s selection.
Matthew Pullen, Head of CBRE Global Corporate Services, EMEA, said: “This engagement represents a great vote of confidence in CBRE’s global and emerging markets platform. We are delighted that one of Norway’s largest and most respected companies has chosen to work with our firm and I am confident our new relationship will serve as a strong enabler for StatoilHydros’ global growth plans.”
Svein Harald Storli, Vice President of Facilities Management Services in Global Business Services at StatoilHydro, said: “The appointment of CBRE as StatoilHydro’s global real estate partner is an important step in the development of our integrated global business support infrastructure. As the pace of business activity continues to intensify, our ability to leverage enhanced capabilities from strategic partners is critical. Our new relationship with CBRE will enhance our ability to deliver a robust property services offering to our businesses worldwide.”
StatoilHydro ASA was formed by the 2007 merger of Statoil with the oil and gas division of Norsk Hydro. StatoilHydro is one of the largest offshore oil and gas companies in the world and the largest company by revenue in the Nordic region. The company is a fully-integrated petroleum company with production operations in 13 countries and retail operations in eight countries.
Sheraton Brussels Hotel sold by CBRE Hotels
CB Richard Ellis today announced that it has sold Brussels’ Sheraton hotel, the largest hotel in the city, on behalf of global hotel and leisure company Starwood Hotels & Resorts, to the pan-European investment company International Real Estate Plc (IRE).
RENTAL MOVEMENTS REFLECT REDUCED LEASING ACTIVITY ACROSS EUROPEAN OFFICE MARKETS
European office markets generally saw downward pressure on rents over the final quarter of 2008, driven by a combination of lower levels of demand and increased levels of vacancy in most markets, according to CB Richard Ellis’ latest market report, EMEA Office MarketView Q4 2008. Across the 27 European markets, prime office rents fell by 2.5% in the fourth quarter of 2008, leaving them just above their level of a year ago.
CB RICHARD ELLIS NAMED CORPORATE REAL ESTATE PARTNER OF THE YEAR AT THE CORENET UK AWARDS
CB Richard Ellis’ (CBRE) Global Corporate Services team has been awarded the coveted Corporate Real Estate Partner of the year award at the 13th Annual CoreNet Global UK awards.
CBRE won the award for their four year partnership with Lexmark International, Inc. Originally an EMEA region contract, the instruction was expanded in December last year when CBRE was selected as preferred supplier to provide transaction management services across the US and Asia. As part of this global appointment, CBRE will provide services in 54 countries to 180 buildings covering a total of 7.5 million sq ft. This instruction reflects the success of a three-year contract with Lexmark, which commenced in 2005, providing strategic portfolio and transaction management services across the EMEA region. In 2006, CBRE was appointed to provide facilities management services for Lexmark’s corporate headquarters in Lexington, Kentucky.
OCCUPIER OPPORTUNITIES EMERGE AS RENT & SUPPLY CONDITIONS CHANGE ACROSS EUROPE’S OFFICE MARKETS
Occupiers are experiencing increased lease flexibility, greater choice of premises and greater incentives in the European office market according to the latest research by CB Richard Ellis. The report reveals that tenants are benefiting from current falls in leasing activity and the subsequent pressure that landlords are coming under to preserve cash flows and maintain capital values. Landlord flexibility has become essential as take-up across the main markets in Western Europe in 2008 declined to the levels seen in 2004-05.
2008 EUROPEAN Cross-border INVESTMENT LEVELS REFLECT diverse LOCAL MARKET conditions
Cross-border commercial property investment activity fell to 45% of total European activity in 2008, according to new research by CB Richard Ellis. The overall decline reflects, to a great extent, the reduction in the number of large investment deals, which are often dominated by international investors (average deal size fell from €42 million in 2007 to €29 million in 2008). However there were significant variations in cross-border activity according to differing local market conditions.
GLOBAL PROPERTY MARKET TRENDS REFLECT SYNCHRONISED ECONOMIC DOWNTURN
Whilst the precise impact varies from one city or country to another, it is clear that the world's property markets continue to be impacted by global financial and economic concerns. Beginning with the U.S. sub-prime dislocation in the summer of 2007, market conditions deteriorated into a severe global credit crisis in 2008, which effectively shut down the global economy in the fourth quarter of 2008. No part of the world has escaped the spreading crisis, including the real estate sector, according to CB Richard Ellis’s Global ViewPoint for the fourth quarter of 2008, which reports on the global status of the commercial real estate markets.
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CB Richard Ellis appointed EXCLUSIVE provider of property services for DHL EXEL supply chain’s growth activity across EMEA
CB Richard Ellis’ Cross-Border Industrial and Logistics team has been appointed by DHL Exel Supply Chain (DESC), Europe’s largest global supplier of logistics services, to exclusively support their expansion programme across Europe, Middle East and Africa (EMEA).
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CEE Property Investment 37% down on 2007 Figures - € 3.5 billion of unleveraged equity waiting to be invested in CEE
CEE Property Investment MarketView Full Year 2008 - reports that total investment turnover in commercial real estate in Central and Eastern Europe (CEE) reached €9.5 billion in 2008. This is 37% down from the 2007 figure, but 47% up on 2005 results. The fourth quarter was extremely slow with a deal volume of around €580 million. Jos Tromp, Head of CEE Research & Consulting, explains: “This low volume is a direct result of a combination of the impacts on overall investment turnover of (1) the temporary freeze of a number of German Open Ended Funds that were active earlier in 2008, (2) the limited lending that is taking place, and (3) unclear prospects on pricing.”
EUROPEAN INVESTMENT ACTIVITY SLOWS IN Q4 - DESPITE BOOST FROM LATE-YEAR DEAL COMPLETIONS
CB Richard Ellis Group, Inc. announced today that European commercial real estate investment turnover slowed to €19.5 billion in Q4 2008, following two consecutive quarters of more stabilised turnover levels of around €27-28 billion. This brings the total 2008 turnover to €116 billion, a level comparable with that registered in 2004.
London, Moscow remain world’s most expensive office markets - Hong Kong’s CBD breaks into top five
London’s West End and Moscow remain the world’s two most expensive office markets, respectively, while Hong Kong’s CBD, Tokyo’s Inner Central District and Mumbai’s Nariman Point round out the top five, according to CB Richard Ellis Group, Inc. (CBRE) Research’s semi-annual Global MarketView/Office Occupancy Costs survey. The report tracks world markets with the highest as well as fastest-growing occupancy costs for the 12 months ended September 30, 2008.
Growth in CEE shopping centre stock set to continue, spreading space more evenly across region
Central & Eastern Europe (CEE) shopping centre stock is expected to grow by more than fifty percent towards 2010, according to new research by CB Richard Ellis (CBRE). Most CEE cities have already added substantial amounts of new shopping centre space to their markets in recent years, and the size of CEE’s shopping centre pipeline suggests this trend is set to continue. As a result, there is likely to be shopping centre space in nearly every CEE city by the end of 2010, with many CEE cities having significantly higher amounts of shopping centre space than today.
Prime retail real estate remains strong defensive investment in economic downturn
CB Richard Ellis today announced that it expects quality retail property to continue to appeal to major investors through the current market downturn. At its retail outlook briefing at the MAPIC retail conference in Cannes, France, the leading global property advisor said prime retail assets – particularly shopping centres – remain sought-after and good defensive investments amidst the global economic downturn. During the third quarter of 2008, retail transactions totaling €6.2 billion were completed in Europe. Germany, the UK and the Nordics were the most active markets, together accounting for almost 70% of completed deals (by value).
Retail rents grow in global strategic destinations
Retailers are focusing on some of the major global fashion capitals, pushing rents in the world’s most expensive retail locations even higher, according to CB Richard Ellis’ (CBRE) latest Global Retail Rents Survey.* Some smaller and secondary retail cities continue to see strong levels of growth, however global fashion capitals such as Hong Kong, London and Los Angeles now sit alongside these markets in the company’s top 25 fastest growing retail rents index, whilst simultaneously claiming some of the most expensive retail rents in the world.
CB Richard Ellis Group, Inc. continues CEE expansion with opening of new office in Montenegro
Budva, Montenegro, November 12 2008 – CB Richard Ellis Group, Inc. today announced that it has opened an office in Budva, Montenegro. The country is one of Central and Eastern Europe’s (CEE) fastest growing emerging markets and the future potential of its commercial real estate market is attractive to the company’s international clients.
Headed up by Nikola Cetkovic, CB Richard Ellis’ new office will provide a full service commercial real estate offering and specialist advice to clients looking to establish themselves in the local market. According to the Central Bank of Montenegro (Bulletin October 2008), 40% of total foreign investment inflow between January and September of this year was attributed to real estate.
The move into the country extends CB Richard Ellis’ platform in Central and Eastern Europe (CEE) and follows its acquisition earlier this year of Eurisko Consulting in Romania and, the opening of a new office in Ukraine.
Andreas Ridder, Chairman Central and Eastern Europe CB Richard Ellis, said: “The opening of an office in Budva is another important building block in the development of our Central and Eastern European business. EU funds have already been assigned to help enhance Montenegro’s infrastructure and, despite the impact of the credit crunch, it is currently one of the region’s top destinations in terms of growth potential.”
Nikola Cetkovic, Senior Director, Montenegro CB Richard Ellis also commented: “The country’s expansion potential makes this one of the most exciting markets in CEE and both local and international clients are already benefiting from our local knowledge and contacts.”
THE YOUNGEST INDEPENDENT COUNTRY OF THE 21ST CENTURY
Open economy and business-friendly environment has become one of the cornerstones of Montenegrin economic policy. Key driving factors for many to invest in Montenegro undoubtedly lie in easy business start-up solutions, lucrative property market opportunities and still untapped business solutions.
» Foreign companies in Montenegro are guaranteed equal legal treatment as local ones. Foreign investor can operate in Montenegro either as a legal entity or as a natural person.
» There is no limit of amount of invested capital. Foreign investors are allowed to invest in any industry and freely transfer all financial and other assets, including profits and dividends.
» Foreign investors can acquire rights to real estate, such as company facilities, place of business, apartments, living space or construction land. All major national and international investment insurance companies insure investment projects in Montenegro.
» 4 days to establish limited liability company in Montenegro for 1 euro
» 9% corporate profit tax rate is by far the most competitive in Europe.
» VAT * Standard rate 17%
* Lower rate 7%
» Property Transfer Tax - 3%
» Property tax – ranging between 0.08%-0.8% of the immovable property’s market value
» GDP growth in % - 7% (2007)
» GDP per capita (€) - 3,673.56
» Inflation – CPI, average annual inflation rate (%) – 4.2%
» FDI inflow € 1,007.7 mil
» FDI top 3 in Europe (1,600 € / capita)
»Tourism inflow growth – 74%
» Unemployment rate – 11.9%
» Average NET monthly salary € 386 (January 2008)
» Nominal annual salary growth – 12%
» Budget deficit/surplus (in mil €) - +168.4
» Crime rate virtually none
Source: Montenegrin Investment Promotion Agency
Double Win for CB Richard Ellis at the European Property Awards
CB Richard Ellis (CBRE) has been named European Industrial Team of the Year for the second year running at the European Property Awards. The company’s capital markets team was also singled out, winning European deal of the year for its advisory role on the €4.4 billion sale and leaseback of Banco Santander’s 1,200 property portfolio.
At a time of greater market uncertainty, both awards recognise the strength and flexibility of CBRE’s international platform.
The company’s European Industrial and Logistics team has increased its market share lead to 18 per cent in the past year as a result of its ability to provide a fully integrated leasing, investment and development service for clients across all significant markets in the EMEA region.
Guy Frampton, Executive Director, Industrial & Logistics EMEA, CBRE said: “A cross-border approach is essential to successful real estate advice in the current market and our 150-strong team offers unparalleled experience across the region. This multi-market capability has enabled us to continue to deliver innovative solutions for clients despite the more difficult economic climate.”
Global access to a diverse range of investors has also benefited the firm’s capital markets team clients and none more so than Banco Santander. CBRE was appointed exclusive advisor on the sale and leaseback of Bank of Santander’s 11 million-sq-ft, 1,200-property portfolio in Spain in the summer of 2007. The transaction was particularly significant because despite the financial climate, the company’s UK and Spanish capital markets teams worked together and sold the entire portfolio for €4.4 billion to three different investors.
Jonny Hull, Executive Director, Capital Markets EMEA, CBRE said: “In a tougher market our ability to profile Europe’s premier assets to the global investor community is a distinct advantage to clients. The final part of the Santander deal – the €1.9bn transaction to buy the Banco Santander headquarters complex in Madrid – has just been completed reinforcing our ability to advise on highly complex transactions in extremely challenging financial conditions.”
The awards were announced on 6 October 2008 at a ceremony at EXPO Real in Munich.
CONTINUED STRONG DEMAND FOR OFFICE SPACE ENSURES CEE OCCUPIER MARKETS REMAIN HEALTHY
Prague, 28 July 2008 – Resilient demand for office space and solid economic growth ensured that occupier markets in Central and Eastern Europe (CEE) remained healthy in the first half of 2008. Take-up in H1 2008 remained strong, but could not keep up with an increasing level of completions, resulting in negative net absorption. This caused the region-wide vacancy rate to edge upward slightly. Nonetheless, declining vacancy rates and continued tight supply in certain CEE markets mean that upward pressure on rents is expected to continue to exist in some markets. This is one of the conclusions reached in the CEE Office Market View H1 2008 issued today by CB Richard Ellis.
The direction of specific office markets in the CEE region will be strongly affected by the extent to which an expected new wave of office space is completed in individual markets. At least in the short-term, continued economic growth and the delivery of more new supply should continue to drive CEE office markets and keep occupier markets robust despite the global economic slowdown.
Solid economic growth is forecast for most CEE countries in 2008, despite the broader economic conditions and lower economic growth in the Eurozone and the US. Yet most countries in CEE are forecast to have slightly lower growth rates in 2008 than 2007, suggesting that economic growth in CEE is being slightly affected by the global financial climate. A primary effect of the global credit crunch on CEE property markets is that they will probably be driven more by market fundamentals than by yield compression, which has driven these markets in last several years.
CEE office markets have historically been supply-driven. A new wave of office space is expected to be delivered to CEE office markets in the next 1-2 years. The substantial size of this pipeline in some smaller office markets might cause an imbalance resulting in a change from supply- to demand-driven market conditions.
Jos Tromp, Regional Manager of CEE Research at CB Richard Ellis, commented: “Generally speaking, office markets across the CEE region are expected to remain strong in 2008. Yet variations in expected office completions might mean that sector performance may fluctuate across different CEE markets.
”Office pipelines in some markets have fallen as investors and developers become more cautious in the current economic climate. While this might limit take-up in some markets, it could also help to prevent some smaller markets from becoming flooded with office space. How much of the office pipeline is completed in the next few years will have a strong effect on the direction of many office markets in the CEE region.
“Markets with limited available supply, strong take-up and limited pipelines have good prospects for increased rents. For example, rents in Moscow (+13%), Kyiv (+27%), Warsaw (+6%), and Prague (+5%) have shown further increases in rents compared to the end of 2007. On the other hand, smaller markets with significant pipelines under construction are less resilient.”
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THE YOUNGEST INDEPENDENT COUNTRY OF THE 21st CENTURY
Open economy and business-friendly environment has become one of the cornerstones of Montenegrin economic policy. Key driving factors for many to invest in Montenegro undoubtedly lie in easy business start-up solutions, lucrative property market opportunities and still untapped business solutions.
CBRE instructed on Europe’s largest straw bale community development
The Building Consultancy team at CB Richard Ellis (CBRE) in Leeds has been instructed to project manage the construction of an innovative £4M eco-friendly Enterprise Centre in Bradford which will be the largest straw bale community development in Europe.
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