Investment market strengthens across Europe
Published: 20 April, 2011
European retail investment reached its highest level since the beginning of 2008, reports CBRE
European retail investment grew to €12.2 bn in the first quarter of 2011 – a 4 per cent increase over the previous quarter and the highest quarterly total since Q1 2008 – according to the latest research by CB Richard Ellis.
The latest retail sector quarterly results are 20 per cent above the five-year average. CBRE says retail is outperforming other sectors and now constitutes 46 per cent of the total European commercial real estate investment market.
As in recent years, the United Kingdom and Germany dominated, accounting for 70 per cent of the quarterly total. These were the only countries to see retail investment surpass €1bn in the quarter. In the case of the UK, a small number of large transactions boosted the results, with the Trafford Centre (€1.9bn) and a further Tesco sale-and-leaseback (€800m) accounting for close to half of all retail investment. Germany, on the other hand, surged ahead, with the first three months of 2011 seeing as much activity as the whole of 2010.
John Welham, head of European retail investment at CBRE, said: “The strength of investor demand targeting European retail has continued to increase from the low point in early 2009. The growth in new institutional capital actively looking to increase allocation to the retail sector should support further recovery at the core-end of the market. Furthermore, we are seeing more capital looking for ‘value-add’ opportunities as specialist retail investors decide that it is time to invest outside prime in certain markets. This is more so in retail than in any other property sector. In the stronger markets investors are once again looking at value-add scenarios and buildings where active management and renovation is needed. The lack of new development is further encouraging this trend."
