European commercial real estate investment activity rises 19% in q4 2013 and 21% for the full year .
Greater London recorded its highest-ever quarterly commercial real estate investment activity in Q4 2013 as a flurry of transactions before year-end increased activity throughout Europe, according to the last research from global property advisor CBRE.
Total commercial real estate investment in Europe reached €53.4 billion in Q4 2013 – a 45% increase on Q3 2013 and 19% higher than Q4 2012. At €154 billion, investment activity for the full year was the highest annual total in Europe since 2007. Most European countries saw increased investment activity in Q4 2013, including those hit hardest by the euro zone crisis.
London experienced an exceptional final quarter, boosted by two £1.7 billion (€2.03 billion) Central London office transactions in late December. As a consequence, Greater London recorded its highest-ever quarterly investment total (when measured in sterling – just over £9 billion) in Q4 2013, surpassing even the peak levels in 2007. Global capital, in particular from North America and the Middle East, continues to drive the London market, with only one of the ten largest transactions in London in Q4 2013 going to a UK-based buyer. Simon Barrowcliff, Executive Director, Central London Capital Markets, CBRE, commented: “London‘s popularity among domestic and overseas investors continues to accelerate. The change in investor perception has changed significantly during 2013, which began with London being seen as a ‘safe haven’ and ended attracting further and more diverse capital as the rental growth story took hold and appetite for risk increased. The UK’s political stability, tax and legal environment makes London the world’s premier investment destination and we have seen new capital arrive from Malaysia, China and South Korea this year, to name but a few. We expect this trend to continue in 2014.”
The fastest growth was in Europe’s peripheral markets, in particular those that were hit hardest by the euro crisis. Italy, Spain, Portugal and Ireland all recorded significantly more than twice the total value of commercial real estate investment in Q4 2013 as in the same quarter in 2012. In aggregate the four countries saw close to €5 billion of investment in Q4 2013 compared to just €1.7 billion in Q4 2012, capping off a year of strong recovery in all four markets.
Strong investor demand was also reflected in increased levels of investment in Central and Eastern Europe (CEE) markets in Q4 2013, particularly outside the core markets of Russia, Poland and the Czech Republic. Significant transactions were completed in Hungary, Romania, Croatia, Slovakia and Ukraine, all markets where investment markets have been flat in recent years.
Jonathan Hull, Managing Director, EMEA Capital Markets, CBRE, commented: “A broad range of investors are active in Europe at the moment, with the strongest activity in the value-add end of the market. Opportunistic investors are targeting what are seen as recovering markets in Italy, Spain, Portugal, Ireland and the CEE. At the same time, there continues to be very strong demand for core investment product in CBD markets such as Central London and the major German cities, which have been key targets over the last 12 months.”
Source : Company