Bucharest Office, Retail Yields Down By 25 Bps In 1Q - CBRE

04.11.2011 By Andrei Circhelan

Office and retail yields in Bucharest continued to drop in the first quarter of the year to 8.75%, and 10.25% respectively, while rents remained constant, property consultants CB Richard Ellis said Monday in a report.

Office and retail yields in Bucharest continued to drop in the first quarter of the year to 8.75%, and 10.25% respectively, while rents remained constant, property consultants CB Richard Ellis said Monday in a report.

In the last quarter of 2010, yields were at 9% for office buildings, and 10.5% for retail assets, down by 0.5 percentage points from the preivous quarter.

For most European markets, office yields stagnated during the first quarter this year, with only Lisbon and Porto registering growths, CBRE said.

The yield decline leads to higher sale prices, which are calculated as a ratio between the revenue achievable by the buyer and the sum paid when purchasing the property. The lower the yield, the higher the sale price and the longer it will take for the buyer to recover their investment.

Greater yield declines on the office space market were noted in Sofia, Belgrade, Geneva (down by 0.5 percentage points each) and Kiev (1 point).

Bucharest stayed in the top tier among cities with the highest yields, outranked by Sofia and Belgrade, each with 9.5%, Moscow (10.5%), St. Petersburg (12%) and Kiev (13%) in CBRE top.

Rents remained at the average level seen in December 2010, namely EUR19.5 per square meter per month.

Retail yields stagnated in most markets included in the survey. Brussels, Athens and Edinburgh were the only ones to see an increase, of 0.25 points.

Bucharest retail yield was ranked third in CBRE report, after Moscow (12%) and St. Petersburg (13%).

Retail rents in Bucharest stood at EUR70 per sqm per month, close to the level registered in December 2010.

On the industrial segment, Bucharest property maintained its yield at 10.25%.

CBRE is based in Los Angeles and it has over 300 officers in 50 countries, with more than 31,000 employees worldwide.