Sponsorship Link
Commercial property investment volumes rose by a better than expected 17.7% in the final quarter of 2011 to reach €36.8 billion, taking volumes for the year to €126.2 billion, 7.8% up on 2010, new figures show.
Must Read
Foreign investors were the main driver of this, increasing activity by 16.2% over the year versus a 3.6% rise for domestic buyers, and raising their market share to 35.8% from 33.2% in 2010, the latest market report from consultants Cushman & Wakefield shows.
Investors have continued to show a strong interest in core markets, with the UK, Germany and France by far the most in demand, taking 61.4% of all investment for the year.
The best growth in activity was in emerging markets. Seven of last year's top 10 growth markets were in Central and Eastern Europe: Bulgaria, Estonia, Slovakia, the Czech Republic, Hungary, Russia and Croatia, with only Switzerland, Denmark and France from the West appearing in the top 10.
Risk appetites did change markedly as the year went by the report reveals. CEE markets saw volumes rise 75% over the year while Western markets grew by just 2.8% but between the first and second halves of the year Western volumes rose 19.7% while CEE volumes were flat at 0.1% as buyers grew more cautious with the eurozone debt crisis picking up.
Follow us
Despite this, central Europe in particular had a good year with volumes up 115.7% and a market share of 4.7%, its strongest on record, as investors adjusted their views on the real level of risk in these markets and also set about trying to find markets with stock and growth potential.
Volumes overall were flat in the Nordic region, with demand good but little supply at the price investors wanted to pay. Only Finland saw a decline in volumes however, with the other non eurozone Nordics all seeing some level of growth, notably Denmark.
All sectors have been in demand, with industrial markets gaining most as volumes rose 24.5% and its market share hit 9.4%. Offices saw volumes rise 11% and its market share reach 44% while retail saw just a 3% increase and its market share dropped modestly from 33% to 32%.
Demand for retail has been good nonetheless, with investors seeing it as a defensive asset, but supply of the right type of retail continues to run below demand and a lack of finance for large lots has also held activity back.
The UK has regained its crown as Europe's largest retail market, which Germany took for part of last year, while France was runner up to the UK as the region’s largest office market, taking over from Germany which fell back to number three.
‘It is clear that there is a lot of nervousness out there and sheer uncertainty may hold back dealing volumes this year. At the same time however the volatility we are seeing in other asset classes as well as the relative level of property yields is serving...
