European retail real estate investment volumes grow

Published:  11 January, 2012

Preliminary analysis suggests that direct investment in retail real estate for 2011 is likely to exceed €28bn, according to Jones Lang LaSalle, representing a significant increase on 2009 and 2010 total volumes of €12.3bn and €20.7bn respectively.

The majority of activity remains focused on the UK and Germany. The UK leads the rankings, despite a strong second half of the year for Germany. Capital Shopping Centres’ purchase of the Trafford Centre in Manchester for over €1.8bn in the first quarter, was the major purchase in the UK market in 2011.

Jeremy Eddy, head of European retail capital markets, said: “2011 saw the development of a multispeed Europe, with national economic performance and stability dictating investment flows and pricing. Around 75 per cent of the total transaction volume was completed in just five countries. This polarisation was not only limited to geography, as 2011 saw an absolute focus on prime property.

“We expect a similar trend in 2012, however we also identify and urge a greater focus on micro locations, and particularly the sustainability and affordability of rents irrespective of geography. This approach will assist investors to identify opportunities outside of the core markets, which will remain the narrow focus of the majority, and ultimately unlock greater returns in the long term.”

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