Mipim WRAP-UP: Experts Chart the Global Future

CANNES, FR-Mipim wrapped up on Friday, and in formal presentations throughout the week, experts from around the globe gave their prognosis for the international commercial real estate market. Not surprisingly–and not unlike the US market–where the investment capital will flow over the next two years is largely a matter of how much of a gamble those investors wish to take.

In many respects, Western Europe most closely replicates the slowly recovering US market. As Nigel Roberts, head of European research for Jones Lang LaSalle, indicated in a press meeting, against a backdrop of low interest rates and generally poor market fundamentals, office rents should bottom out in 2004, by as much as 10%. By the end of the year a slow uptick in demand will begin to reverse that trend. The most obvious exceptions to this downward track will be London, Moscow and Brussels, he noted. But it will not until 2006 that the full impact of a continent-wide recovery will be felt. Eastern Europe generally performed stronger than the Western sector over the past few years and is better positioned to benefit from the upturn.

According to JLL figures, gross returns on office real estate, flat in 2001 through ’03, should pick up by 5% through 2007. Eastern countries, meanwhile, posted 12% gross returns and are on target for 13.5% gains through ’07.