Commercial Real Estate Investment in Europe Sees Highest Q1 Total Since 2007
- Growing trend for portfolio and platform transactions
- Spain, Italy, Belgium, Czech Republic and Norway see greatest increases
- UK continues to attract significant and growing proportion of investment
According to the latest research from CBRE, European commercial real estate investment activity in Q1 2015 totaled just under €55 billion, an increase of 30% compared to the same period in 2014.
The first quarter of this year was the highest Q1 total since 2007, when European investment volumes reached €60 billion. It is notable that there has been a significant rise in the number of portfolios being brought to the market, a sign that European commercial real estate is experiencing increased liquidity and investors are starting to seek economies of scale. There is also a growing trend, particularly amongst private equity firms, for platform acquisitions and corporate takeovers. All of these are helping to drive up total activity across the region.
The UK contributed a substantial proportion (42%) of the growth in investment activity recorded in Q1 2015, helped by the weakness of the euro. Investment in southern Europe also continues to grow strongly. Activity in Spain remains at a very high level, the four quarters to Q1 2015 represent its highest ever 12-month total for investment turnover. Investment in Italy is also continuing to increase, with Q1 2015 turnover of €1.9 billion, 159% higher than in Q1 2014. Portugal too has seen significant growth in investment activity, €218 million in Q1 2015 compared to just €31 million in for the same period in 2014.
Investment in Central and Eastern Europe remains somewhat constrained, with political and economic issues around Russia continuing to be an issue for investors. The Czech Republic, however, has been an exception to this trend.
Despite the fact that CEE showed up as an area of strong interest from global investors in our recent Investor Intentions Survey, the level of activity remains subdued when compared to the long term average. However, in contrast to the regional trend, investment in the Czech Republic has been increasing. Q1 2015 was its third successive total above €800 million, double the country’s 10-year average of under €400 million per quarter.