Milan continues to be a good bet for 2003 with strong market fundamentals, quality stock coming on line and take-up levels remaining high. The release of ex-industrial land for office development by the state has freed prime areas for office re-development. Its sheer size, the number of foreign companies starting up business there and its proximity to other key Italian markets has made Milan a top investment choice for 2003. The smaller UK markets listed above offer a different type of opportunity.
The second European office market projection focuses on average rental growth expectations for 2003. Again the story focuses on the projected success of a few smaller and secondary markets. The other main theme for European office property in 2003 is, in general, most main markets will not experience either rental growth or rental decline. 2003 will see flat rentals and a period of stability while the economy gathers strength. The property market has historically followed economic fundamentals and sentiment but is generally slower to react to market conditions. This period of flatness is expected to produce positive growth scenarios for 2004.
The top markets for rental growth in 2003 are projected to be Leeds, Glasgow, Edinburgh and Sheffield. The following markets are projected to have flat rental growth in 2003: Berlin, Dublin, Cardiff, Paris, Milan, Amsterdam, Prague, Warsaw and Lisbon. In a period of economic uncertainty, flat growth must be viewed in a positive light, especially while many other investment classes are returning negative results.