European Real Estate Deals Reach $59 Billion

Posted on Jan 30, 2013 12:18 PM EST
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Investment volumes in European commercial real estate reached 43.7 billion euros ($ 59 billion) in the fourth quarter of 2012, the highest quarterly level of since 2007, said realtor Cushman & Wakefield on Wednesday.

While the annual volume ended only a marginal 1.5% higher than 2011 at 133.8 billion euros, Cushman & Wakefield predicts that recovery will start to gain momentum in 2013. Improvements in economic stability and investor confidence will drive further increases against a backdrop of increasing divergence, with some markets seeing strong demand and robust performance as others stagnate. 

David Hutchings, head of European research at Cushman & Wakefield said that the increase signals a renewed faith in Europe's commercial property.

"Cross border investment was the biggest area of growth last year, it outpaced the domestic buyers. In any country in the world you will find people shopping for property in Europe," according to CNBC.

Investors are again heavily focused on core, larger liquid markets - although over the year market share in France, the UK and Germany slipped slightly. The Nordics gained ground, with Finland (up 98%) and Norway (up 59%) the most dynamic. The Netherlands and Luxembourg slipped but Switzerland trebled deal volumes sparked by bank sales.

 The main losers were closely correlated with macro risk: Greece, Ireland, Italy, Portugal and Spain saw a 26% fall in activity, taking their market share down to just 3.8% versus a 10-year average of 11%.

"Increased corporate and commodity investment could promise a major change in the region's standing in the long term but political stability must be secured," C&W said.

Despite the euro zone crisis, a broad range of players from China and other parts of Asia, the Middle East, Europe, and North America have been active investors in Europe's core markets.

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