LONDON-The industrial rent index for the 15 European countries tracked by CB Richard Ellis fell an additional 1.5% in Q2, leaving the year-over-year growth rate at -5.4%. But according to a CBRE report released in mid October, the overall result conceals the fact that prime rents were stable in many key Western European industrial markets, including primary distribution centers in Germany, France, Italy and the Netherlands.
Prague, Warsaw, Sofia and Bucharest also remained stable or experienced limited decline. Belgium, Ireland and Spain, on the other hand, saw notable falls, with rents in the last two having declined by 20% or more over the past year. In addition, some more peripheral markets such as Kiev, Moscow and Budapest also saw year-over-year falls greater than 20%.
With weaker world trade continuing to affect all markets, the extent to which new supply contracts from recent high levels will be a key factor in determining whether European rents endure further decline. Average annual rents vary widely from a low of €43 a square meter ($4 a square foot) in Brussels to a high of €161 a square meter ($15 a square foot) in London's Heathrow submarket.