Retail drives European recovery
Published: 18 May, 2011
The European commercial real estate investment market continues to recover, driven by an increase in demand for prime retail property assets, according to the latest CB Richard Ellis (CBRE) European Capital Markets report.
Investment in retail property in Q1 2011 continued to grow at a greater pace than the rest of the European market, accounting for 43 per cent of total transactions in the quarter. The €12.2bn transacted represented a quarter-on-quarter increase of 4 per cent and the highest quarterly total since Q4 2007.
European commercial real estate investment reached €28bn in the first quarter of 2011 – a 32 per cent increase on the same period last year. The latest results, while lower than the €38.6bn transacted in Q4 2010, are in line with the continuing increase in investment activity that started in late 2009 and was maintained throughout 2010.
John Welham, head of European retail investment at CBRE, said: “Since the global economic downturn the vast majority of investors have focused on core assets and locations, and this remains the case today. However, throughout the latter part of 2010 and into 2011 the number and type of active investors broadened, and their interest shifted further along the risk curve. This shift in demand towards ‘value add’ is strongest in the retail sector, while geographically, the expectations are that Germany, Sweden, Spain, and CEE markets are set to benefit most in the short term.”
Michael Haddock, director of EMEA Capital Markets Research, CBRE, said: “The retail sector has continued to show strong growth and the evidence from both investment activity and pricing indicates that this sector is ahead of the rest of the market in terms of recovery. The uplift is being driven by the deep pockets of institutional investors looking to increase their direct exposure to the sector - a trend expected to continue to support further recovery at the core-end of the commercial real estate market generally."
