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Increase in commercial real estate investment revealed | 10 December 2012

Investment figures in the European commercial real estate market remain stable, with a CRBE Group survey highlighting a 14 per cent increase in the third quarter.

Reported by propertywire.com, the document showed investment in Europe totalled 28.3 billion euros in Q3, marking a significant increase on the level recorded in the second quarter. The former figure was almost exactly on a par with turnover in the third quarter of 2011.

A strong seasonal effect has had an impact on investment turnover in the last three years, so the CBRE expects the final quarter figure to be even higher.

The most significant growth was seen in the UK, which accounted for approximately 42 per cent of investment deals in Europe, while France and Germany also performed well. Russia remained particularly strong too, according to mirela.bg.

Jonathan Hull, head of EMEA Capital Markets at CBRE, believes most cash is being spent on bond-like property – buildings that are liquid and have a long, guaranteed income.

“As a result, the spread between prime and secondary is at an all time high,” he said.

“The highly polarised market creates opportunities in the value added segment of the market. The price differential between prime and anything that is not prime is substantial and therefore the reward for successfully repositioning an asset by active asset management, be that capital expenditure or re-negotiation of leases, is similarly substantial,” he added.

The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.

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