Local European markets have their own way of doing things. When it comes to providing a broader pan-European or EMEA view, it is important to discern these differences in order to compare markets on a like-for-like basis as much as possible.
With real estate yields there are a myriad of factors that can impact the figures being quoted. Differences can also emerge as a result of descriptions lost in translation – one market’s Gross Yield can be another’s Net Initial and so forth. The purpose of this report is to examine the yields being quoted by a range of markets, in order to generate a set of consistent yield figures with which to compare markets. This takes into account the factors incorporated into the price/cost of acquisition and ownership, the rental level reported and the non-recoverables applicable when calculating NOI (net operating income).
This report does not intend to provide is a comparison of valuation market practice. We fully appreciate that different practices operate in different markets for very valid reasons. Equally, we know that certain valuation practices will tend to include all capital expenditure (capex) as well as acquisition costs when reporting a Net Initial Yield, but this makes it impossible to compare markets on a consistent basis as capex is often unknown or specific to an individual asset.