European Commercial Property Investment Rises in Q3

By Simon Morris On Tuesday, December 15 th, 2015 · no Comments · In ,

A range of reports have shown that European commercial property investment levels, particularly in the retail and office sub-sectors, rose throughout the third quarter of 2015.

Commercial property investment

Property Wire recently reported that figures from CBRE show that €62 billion was invested in European commercial real estate between July and September of 2015. This is an 18% rise on the same period of 2014, indicating that European commercial property is proving increasingly popular with investors.

The CBRE data also showed that France recorded the most noteworthy increase of investment activity in the third quarter. Investors devoted more than €7 billion to French commercial real estate in the period, over double the amount recorded in the third quarter of 2014. However Germany racked up the most commercial property investment in absolute terms; €14 billion, a rise of €5.6 billion on the same quarter of last year.

Market analysis

Jonathan Hull, the managing director of Europe, Middle East and Africa (EMEA) Capital Markets at CBRE, said: “We have seen good growth across the European commercial real estate investment market in the last quarter. With high levels of transactions expected in the fourth quarter, this current trend is set to continue and we believe we will see a strong year end in terms of investment volumes.”

The managing director went on to add: “Retail recorded the strongest levels of investment growth this quarter up 45% on the third quarter of 2014, the second highest level we have seen in 10 years of data. The office sector also performed well across the region, underscored by some significant transactions in France, the UK, Norway and Sweden.”

Attractive to investors  

If we look at the European office sector as an example, we can see why investors are flocking to the continent’s commercial property market. According to International Property Magazine, figures from Knight Frank’s latest European Quarterly report indicate that aggregate office take-up in the major European markets rose 11% year-on-year throughout the first three quarters of this year. Meanwhile Knight Frank’s Prime Office rental Index rose at a modest pace of 1.1% from July to September of 2015.

European commercial real estate investment levels increased over the third quarter of this year. Demand for commercial space, especially in the office and retail sectors, is high. This demand is spurring commercial property rents up, providing investors with a good opportunity to secure a stable return on their investment.

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