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News Release

London, Moscow

Prime European property to hold up despite economic upheaval

Interest in main European centres to remain during 2012

London, Moscow, 16 January 2012 – The latest economic forecasts from Jones Lang LaSalle suggest that barring the worst scenarios, the outlook for investments in prime offices, retail and industrial property remains positive with strong demand across European cities.

Andrew Burrell, Head of Forecasting, at Jones Lang LaSalle explained: “Against a sharp deterioration in economic sentiment, it is no surprise that there has been some downgrading of the outlook. However, whilst 2012 won’t be a vintage year, our forecasts show modest rental growth across major prime property sectors will continue.”

According to Jones Lang LaSalle, the average rental growth rates in European prime sector in 2012 will amount to 1-2%, while in Moscow and St. Petersburg the indicators can increase by 4-10%.

Jones Lang LaSalle forecasts also suggest prime commercial sectors will have much greater resilience to economic fluctuations than during the previous global downturn, with capital values expected to be maintained in all sectors.

Robert Stassen, Head of Capital Markets Research EMEA at Jones Lang LaSalle added: “We are still seeing strong interest across prime property in traditional centres like London, Paris and Munich. Because these areas are perceived to be low risk, prices will remain high. Growth will be driven primarily by markets in North and Eastern Europe with CEE centres such as Moscow and Warsaw having the most exciting prospects next year.”

Olesya Cherdantseva, Head of Retail and Capital Markets Research, Jones Lang LaSalle, Russia and CIS, noted: “Investors looking for high yields realize the high potential of Russia. Yields in Moscow and St. Petersburg are still exceeding European markets’ indicators. Moreover, we expect the further increasing of asset value because Russian indicators including renting rates have not restored to the pre-crisis level yet unlike European ones. Due to our forecasts, rental rates in all commercial real estate sectors in Russia will continue their growth in 2012.”

Whilst investment sentiment has suffered due to economic uncertainty, prime property yields are also forecast to remain steady over the next 12 months.

Andrew Burrell commented: “Yields look relatively attractive and hold a premium compared to other assets, with bond prices at rock bottom levels in many markets. Despite this upbeat picture, significant threats remain. The risks are firmly on the downside in 2012, with the clearest one being uncertainty surrounding the Eurozone crisis where much still needs to be done to regain market confidence.”

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 167 million square meters worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.9 billion of assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Almaty. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010 and 2011 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. For further information, please visit our website