Consumer retail spending increases and with that the confidence among retailers. At prime retail location vacancy rates are decreasing. However, the impact of the growing economy on rents, yields and vacancy rates is not visible in all retail cities.
In Amsterdam, the prime yield in the city center dropped to a level of 3.75% mid 2017. Also in The Hague, Utrecht and Maastricht, yields declined in high streets. These cities are popular among investors where the price for prime retail properties is driven up due to a lack of supply.
Bart Stek, Head of Research: “Despite several bankruptcies, we see that A1 locations in the best shopping cities have virtually no vacancy and attract stable tenants. This causes declining yields in these areas. We expect an increasing interest from investors for real estate in the city centers of Utrecht and Eindhoven in the coming period. "
Prime rents in the main high streets do not show an increase for the time being. Exceptions are Amsterdam and Utrecht, where prime rents rose to € 3,050 and € 1,500 per square meter per year. For the next six months stable rents are expected. In cities such as Rotterdam, The Hague, Nijmegen and Arnhem, a further decline in rents is expected.
Also, rents at urban shopping centers decreased in general. Amsterdam and Utrecht are again the exception here, especially because of the popularity among international retailers. In Utrecht, the prime rents for shopping centers remained at € 1,350 per square meter per year. In Amsterdam these rents rose to € 1,650 per square meter per year.
"The favorable economic situation is causing declining yields at a lot of high streets. It is striking that rents are also falling in many high streets and urban shopping centers. We expect these trends to continue in the next six months." Bart Stek concludes.