Index shows slowing growth is global problem
Property Editor
SA is not alone in facing slowing retail rental growth, according to the Emea Retail Market Index produced by consulting company CB Richard Ellis.
Muted retail rental growth appears to be a common phenomenon across Europe, the Middle East and Africa.
Despite this slower growth, however, prime locations and major centres are resilient. At nearly 10%, rental growth in the European Union remains above growth recorded in the office and industrial sectors.
International retailers are fuelling competition for representation in the prime high streets and top shopping centres around Europe.
'This is probably why prime locations are faring much better than secondary and tertiary retail areas,' the index researchers say.
Yields in shopping centres across the euro zone have converged. According to researchers, 'currency issues have a large part to play in this, but it is also evident that there is increasing uniformity of investor and product across the euro zone'.
Major shopping centres in the region are increasingly similar in design and occupied by the same international tenants. Ownership of the euro zone's large shopping centres is becoming concentrated in the hands of a relatively small number of specialist investors.
The index shows SA's prime retail rentals are among the lowest in the world, as measured in euros per square metre a year.
Prime retail rentals in Durban, Cape Town and Johannesburg average à 346,33/m² a year against London's à 4906/m² a year, the highest rate recorded.
The lowest figure on the list is à 167/m² in Gaborone, which is followed by Tel Aviv's à 298/m².
McDonald's SA's property network developer, Osafo Gyimah, says the that difference in rentals between SA and Europe is not worth comparing because of varying economic fundamentals.
Rents in Europe reflect different economic conditions and currency dynamics from SA's, says Gyimah.
Rents for McDonald's outlets in London and in SA are reflected in the difference in prices of the hamburgers they serve: in London a Big Mac sells for about £2 (R32), while in SA the price is R9. Paris and Dubai are the only other capitals that feature in the category above the à 4000/m² a year mark on the index.
Berlin, Dresden, Frankfurt, Hamburg and Munich dominate the category between à2 000/m² and à 3000/m², alongside Birmingham and Athens.
Zurich, Geneva, Madrid and Warsaw fall in the à 1000/m² category.
Helsinki, Nice, Lisbon and Stockholm are among the few European cities that come in under the à1 000/m² mark.
Publisher: Business Day
Source: Business Day
SA retail rental among lowest in world
Posted On Wednesday, 06 March 2002 03:01 Published by eProperty News
Index shows slowing growth is global problem
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