Rental declines were experienced in Brussels and London's WestEnd (both at -3.4%), but the report added that that West End primerents are readjusting after unusually strong growth last year.

Rents rose in Lyon (4.7%) and Madrid (1.0%). Rental values wereunchanged in all other indexed cities. Considerable investment fromreal estate funds, equity valuations and asset-backed securitiesare relying on a European office rental recovery. In anticipationof recovery, there have been huge capital flows into the sector inthe past few years that have pushed yields down and boosted capitalvalues.

"The economic drivers for Europe's office markets are positivebut nevertheless are proving to be patchy across Europe with mostcountries expected to experience slower economic growth in 2005than in 2004," says Nigel Roberts, head of European research atJones Lang LaSalle. "With continued low interest rates, especiallyin the euro zone, leveraged investment continues to lookattractive, but with slower economic growth a broadly basedrecovery in the rental markets may take longer to materialize."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.