CB RICHARD ELLIS
European Investment Quarterly www.cbre.eu/research
Q3 2009
Improved market sentiment resulted in an upturn in the European commercial real estate investment market in Q3. Activity totaled €17.3 billion, an increase of 34% on Q2 2008.
Q3 Investment Turnover Compared to:
Q3 2008 Q2 2009
The revival in activity has been driven by the major western European markets. The UK and Germany saw the most notable changes, both reporting increases of more than 50% in investment compared to Q2 2009. Although investor interest in Germany remained local and stayed firmly fixed on the prime segment of the market, the situation was rather different in the UK. Investors in the UK have started to see value across a wider product range and have become increasingly prepared to take additional risk by investing in the more secondary product. The UK has also been notable because of the very high proportion of foreign investment. In Central London around 80% of acquisitions so far this year have been by foreign buyers.
Another development in the European market was in the completion of two deals for over €1 billion; the first since Q3 2008. The two transactions, one a part share in an office complex in London and the other a sale and leaseback of bank branch outlets in Spain have little else in common. However, they do illustrate an improved ability for the market to complete large transactions compared to the position in the first half of the year. Deals for more than €100 million were much more common in Q3. The upturn in activity suggests that many investors believe that the European market is approaching the bottom of the cycle; and in some cases is past that point. However, while the investment market is clearly improving, the occupier markets are still very weak and are yet to benefit from the slow economic recovery. In contrast to stabilising yields, the trend in rents is still quite firmly down.
European Investment Turnover (€ million)
80,000
60,000
40,000
Contacts
20,000
0 Q1 06
Michael Haddock Michael.Haddock@cbre.com
Q2 06
Q3 06
Market Turnover
Tel. +44 207 182 3274
€ million
Q4 06
Q1 07
Q2 07
Q3 07
Q3 2009
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q2 2009
change
UK
6,608
4,201
57%
Italy and Iberia
2,944
2,413
22%
Germany
2,703
1,620
67%
Iryna.Pylypchuk@cbre.com
Benelux
1,591
997
60%
Tel. +44 207 182 3184
France
1,482
1,766
-16%
Nordics
1,090
1,312
-17%
550
169
226%
17,300
12,925
34%
Iryna Pylypchuk
CEE Europe
Q3 09
© 2009, CB Richard Ellis, Inc.