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News Release

London - Moscow

Prime office yields continue to stabilise across Europe

Jones Lang LaSalle issues Q3 2009 European Office Yields Tracker

London - Moscow, 25th November 2009 – With the bottom of the investment cycle in sight, prime office yields across Europe continued to stabilise during Q3 2009, according to Jones Lang LaSalle’s latest Prime European Office Yields Tracker. The aggregate yield moved in by 5bps over the quarter to 6%, and this was accounted for mainly by movement in Western Europe, with yields in Central and Eastern Europe (CEE) remaining flat. Only three markets witnessed yield decompressions (Eindhoven, Bucharest and Utrecht).

Of the 46 markets tracked, ten locations experienced yield compressions during Q3 2009 from between 50bps in Leeds to 5bps in Brussels, Gotheburg and Malmö, while London West End moved in by 25bps. London City remained static, but moved in by 25 bps during Q2 2009. However, despite the continued trend of yield stabilisation across Europe prime office yields still remain above their levels this time last year and well above peak yields in 2007, while yields in secondary markets continued to move out. Moscow currently sits 400 bps above Q3 2007 levels, while Bucharest is up by 275 bps and Warsaw 125 bps. Stockholm, Paris and Helsinki all sit 75 bps above their Q3 2007 levels.

Chris Staveley, Head of the Pan European Capital Markets team at Jones Lang LaSalle, said: “Investor appetite continues to focus on prime, income producing assets in core locations. There is a renewed willingness to enter competitive bidding processes for certain situations and drive new pricing levels for the best properties let to secure tenants. London remains at the forefront of investor interest with Paris close behind, but with a growing lack in supply of suitable opportunities investor demand will be forced to look at new locations around Europe which in turn could compress yields further around the region.”

Chris concluded: “Capital values are still significantly behind peak levels and will remain under pressure until new financing becomes available and investors become willing to take on more real estate specific risk. As prime yields stabilise rents continue to decline in most markets however.”

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specialising 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 2008 global revenue of $2.7 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.3 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $37 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 and 2009 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg.
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