EUROPE – Latest figures from Jones Lang LaSalle (JLL) have lent further support to the existence of a nascent revival in the commercial property markets in Spain, Italy and Ireland.

They show investment activity in Southern Europe in the first half of the year was up 34% on the same period in 2012.

The findings have been announced against a background of increasing inflows into Europe as a whole, where commercial real estate attracted €58bn during the six-month period, a rise of 12% over H1 2012.

JLL attributes the upturn in Spain and Italy to capital inflows from outside the region, notably activity by Allianz Real Estate and AXA Real Estate Italy, and Qatari investment in hotels in Italy and Spain. 

AXA Real Estate’s acquisition of Generalitat’s Spanish office portfolio worth €150m was significant as the first foreign acquisition since the Spanish sovereign debt crisis.

Richard Bloxam, head of European capital markets at JLL, said: "The largest markets of the UK, France and Germany remain attractive to global real estate investors. However, as we anticipated, volumes are beginning to increase in Southern Europe, reflecting the rising appetite from investors over the last nine months. Current investor sentiment would suggest that activity will accelerate as the bid/ask spread begins to narrow."

Ireland’s recovery continues apace. Inflows in the first half reached €533m, compared to €673m recorded for the whole of 2012.

A highlight of the Irish market was the success of the first Irish real estate investment trust (REIT), Green Property, which raised €310m, some €110m above target.

JLL has pointed to an increase in available stock as an indication of rising confidence in Ireland’s commercial property market.

Robert Stassen, head of European capital market research, said: "We feel that investment sentiment is improving, which, together with better availability of debt, has given investors the confidence to increasingly invest outside the prime locations. This should translate in solid reported investment volumes in the second half of the year."

Greater investment activity in Southern Europe has coincided a number of real estate fund managers recruiting experts in the markets.

Cordea Savills has appointed Giuseppe Oriani as managing director of its Milan-based Italian subsidiary with the remit to grow its Italian business.

Nathalie Charles has been hired as AXA Real Estate’s regional head of asset management and transactions, Southern Region, taking on responsibility for AXA’s assets across the region.

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