London-Kyiv, November 9, 2017 – Total real estate investment in Europe reached €66bn in Q3 2017, representing a 12% increase on the same period last year, according to the latest report from global real estate advisor, CBRE. This brings 2017 year-to-date European real estate investment volumes to €196.5bn. Investment volumes for the last 12 months reached €288bn, a 14% increase compared to the same period in the previous year.
The increase in Europe is supported by continued growth in the UK, driven by several high-profile office transactions, including the sale of 20 Fenchurch Street (commonly known as the Walkie Talkie) for £1.28bn. UK investment volumes reached €18.4m in Q3 2017, up 49% on the same period last year, which was impacted by the referendum. Transaction volumes in Germany also remained robust, although growth eased in comparison to previous quarters. However, investment volumes for the last 12 months were up 19% on the previous 12 months. Italy, Spain and the Netherlands also all posted strong growth in comparison to the previous 12 months. In France, investment turnover was below Q3 in 2016, but market sentiment is increasingly positive.
Robust growth in the industrial and logistics sector once again characterized the market in Q3 2017, with investment volumes up 14% on Q3 2016 and 73% on the preceding 12 months. Alternatives and hotels also performed strongly but it was offices that represented the largest proportion of the market, with €32.6bn worth of office transactions in Q3 2017, up 50% on Q3 2016. Office transactions for the last 12 months reached €120.2bn, representing a 12% increase on the same period in the previous year.
Jonathan Hull, Managing Director of Investment Properties, EMEA at CBRE, commented:
“Investment volumes in Europe remain at elevated levels driven by strong growth in the UK. The UK market continues to recover from the impact of the referendum and the devaluation of sterling continues to attract significant European and global capital. UK growth is supported by high levels of overseas investment, particularly in London, which has resulted in several exceptionally large office and logistics transactions. The core markets of Germany, France and the Netherlands have maintained momentum in Q3 and we expect a strong final quarter. Economic recovery in the Southern European markets is reflected in the local property markets, which continue to attract capital. Transaction volumes in the last 12 months in both Spain and Italy out-performed the preceding 12-month period.”
Sergiy Sergiyenko, Managing Partner of CBRE Ukraine, commented:
“Ukraine’s economy is starting to show signs of improvement. Hence, positive movements were also reflected in the real estate market. The first three quarters of 2017, have already taken over the annual investment volume results of 2016, amounting to $106 mln, as of the end of Q3. Transactions in the office sector dominated the investment volume year-to-date, accounting for 73% of estimated volume. While several small-scale transactions materialized in the office sector, the most pronounced acquisitions of Eurasia (GLA – 30,000 sq m ) and Prime (GLA – 9,000 sq m ) business centers were finalized by Dragon Capital Investments Limited in Q32017. We expect further recovery in investment sentiment, providing that moderate economic growth supports the real estate fundamentals.”
