* CBRE all-property prime yield index flat at 6.13 pct in Q3
* Prime yields trending down in London, Paris office mkts
* Rental market remains more difficult
LONDON, Oct 6 (Reuters) - Prime commercial property yields across Europe are showing signs of stabilising in the third quarter and are even dropping on average in London and Paris, global property broker CB Richard Ellis (CBG.N) said on Tuesday. CBRE said its EU-15 all-property average prime yield index was stable at 6.13 percent in the quarter, having gained 130 basis points (bps) between mid-2007 and the first quarter of 2009.
Nick Axford, CBRE’s head of EMEA Research and Consulting, said while there was some variation in the extent to which individual markets had repriced, prime yields were generally showing sings of levelling off.
In some highly liquid markets that have seen substantial repricing -- namely London and Paris -- the direction of yield movement was now downwards.
“The rental market remains more difficult with economic conditions still weak, although even here the degree of decline seen in the third quarter is moderate by recent standards,” Axford said in a statement.
CBRE, the world’s largest property broker, also said that while the theme of stabilisation was common across all sectors, certain differences were also apparent.
The EU-15 office yield index fell slightly in the third quarter, as it had in the second, reflecting downward yield movements in London’s City financial district and Paris.
“Small upward adjustments are still evident in some markets including the main Italian cities, but elsewhere prime yields are broadly unchanged from their mid-year levels,” CBRE said.
The EU-15 industrial yield index was static in the third quarter, while the retail yield index rose marginally but is within 25 bps of its end-2008 level, CBRE said.
Reporting by Andrew Macdonald; Editing by John Stonestreet