France experienced the most noteworthy increase with investment activity of over €7 billion, almost double that of the same quarter in 2014, according to figures from CBRE. French investment activity was dominated by domestic investors who accounted for more than 70% of CRE investment in the third quarter, and who typically favoured large offices located in the Paris CBD. Whilst France benefitted from the biggest change in investor sentiment, it was Germany which saw the greatest increase in absolute terms, with quarter three investment of €14 billion, up €5.6 billion on the same quarter last year. The report points out that the €36 billion already invested in German commercial real estate in the first three quarters of this year is 40% higher than the equivalent period in 2014. Alongside France and Germany, several other countries experienced a strong third quarter. Norway and Sweden saw investment volumes grow by 139% and 68% respectively on the third quarter of 2014. Southern Europe also performed well, with Portugal and Italy benefitting from a slight shift in investor focus away from the Spanish market. Belgium attracted near record levels of investment in the third quarter, boosted by several large retail transactions. In Central and Eastern Europe, Poland, the Czech Republic and Hungary saw the most investment activity. At a city level, the most notable aspect was the move of the Nordics up the table of Europe’s largest CRE investment markets with Oslo, Copenhagen and Stockholm making the top 10. Typically these Nordic capitals have very high levels of domestic investment, around 70%, with cross-border European investment accounting for around 25% and just 5% of capital coming from outside of Europe. However in the third quarter foreign investment accounted for more than half the total in both Oslo and Copenhagen. London and Paris continue to fill the top two spots in the league table, but interestingly all five of the main German markets make it into the quarter’s top ten for the first time since the first quarter of 2013. ‘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,’ said Jonathan Hull, managing director, EMEA Capital Markets at CBRE. ‘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,’ he explained. Prime yields continued to drive downwards, with substantial falls in several major markets in the third quarter. Notably for all three main sectors the weighted average is now below its value in the pre-crisis low of 2007, the report shows. The All Property average is down by 46 bps over the last four quarters and the rate of decline has accelerated in 2015, despite the growing expectation that short term interest rates might finally start increasing in the next few months. It also says that there are also some signs that the relationship between prime and secondary yields is stabilizing. The prime secondary spread had been closing rapidly since the end of 2013, but in the last two quarters it has been relatively stable, it concludes. BOOKMARK THIS PAGE (What is this?)
Investment in German commercial real estate continues to grow, adding €62bn in Q3 , up 45% from the same quarter in 2014 . The most noteworthy growth was in France , where investment nearly doubled, to over € 7bn , largely driven by domestic investors. However, Germany posted the highest level of overall investment at € 7bn , up € 5.6bn on the same quarter last year . "This current trend is set to continue and we believe we will see a strong year end in terms of investment volumes,’ said Jonathan Hull , Jonathan Hull , EMEA Capital Markets at EMEA Capital Markets .