Investment in Commercial Property across Europe Indicate 42% Rise

January 29, 2010 by admin
Filed under: Property market

Commercial real estate investment has risen 42% in Europe in the past quarter, compared with the previous quarter to the highest level ever since the collapse of Lehman Brothers in 2008. According to the property consultancy, more than €25.7bn of property deals were done in the fourth quarter of 2009, which doubled the levels being traded in the first two quarters of the year, according to CB Richard Ellis. This is the highest quarterly trade ever since the collapse of Lehman Brothers and the beginning of the sharpest point of the property slump. The data support anecdotal evidence of a rush back to property investment by a range of institutions after a bounce in values in markets such as the UK ever since the summer. The rise in fourth quarter activity brought total 2009 turnover to €70bn, still lower than the €121bn recorded in 2008. Almost every European market saw an increase in investment activity in the fourth quarter. The UK took by far the largest share of the new investment, with more than a third spent on British property. Investment in the UK rose 64% in the second half compared with the first six months of the year. The next largest market was Germany, which accounted for about 15% of investment activity. The fourth quarter is generally one of the busiest periods owing to the rush of deals being completed towards the end of the year, although CBRE said the turn round was expected to be sustained into 2010. The upturn in investor interest began in the most important European markets but was spreading further in the region. The strongest growth occurred in central and eastern Europe, an area traditionally seen as higher risk than more established markets in western Europe, though the pick-up came from a lower base. There was also significant increase in cross-border investment in the second half of the year. German open-ended funds alone spent more than €1bn in December, with at least 13 acquisitions across seven markets. Sovereign wealth fund from outside Europe also contributed to the rise in activity.

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