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European Commercial Property Investment Falls in Q1

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Europe  Real Estate Investment  Jones Lang LaSalle  Commercial Real Estate  CB Richard Ellis  David Green Morgan 

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By - Tuesday 24 April 2012

European Commercial Property Investment Falls in Q1

The amount of money invested in European commercial property markets fell by 31 per cent in the first quarter of 2012, compared to the final three months of 2011. This is according to research published by CB Richard Ellis (CBRE), which noted total transaction volumes for the period from January to March this year stood at EUR 24 billion (GBP 19.6 billion). The firm put the reduction down to a "seasonal slowdown in activity", although pointed out certain markets attracted significantly more commercial real estate investment than previously.

One group that stood out was the Nordic countries, recording almost 50 per cent more activity in the first quarter of this year than in the previous three-month period. Head of Europe, the Middle East and Africa (EMEA) capital markets Jonathan Hull commented: "Government finances are favourable compared with the rest of Europe, as are the prospects for economic growth. Solid fundamentals have driven an increase in the number of foreign buyers looking to enter the region."

It is not only the EMEA area that has experienced a slowdown in commercial property investment, though, with Jones Lang LaSalle revealing earlier this month that global transaction volumes in the sector were down by 23 per cent during the first three months of 2012, compared to the final quarter of last year, standing at USD 75 billion (GBP 46.5 billion). However, the firm stated, despite the worldwide economic uncertainty, the fundamentals of real estate markets "remain attractive". Global capital markets research director at the organisation David Green-Morgan explained many institutional investors are turning to commercial property at the expense of other asset classes, such as equities and commodities. He added activity will be boosted by the "ongoing debt issues" in the sector, noting this will "pose problems for some and present opportunities for others".

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