Real estate investment in Europe remained buoyant in the second quarter of the year, despite uncertainty regarding Brexit, according to CBRE.
Commercial property transactions in Q2 totalled €54bn, up 2.5% on the previous three months and 30.4% above the 10-year average.
However, the period failed to match the activity seen between April and June last year.
A slowdown in the UK and Germany – due to uncertainty regarding the EU referendum and a lack of available stock, respectively – moderated the overall numbers for Europe.
CBRE said the UK “performed less strongly than its continental European counterparts in the run up to the Brexit vote”. But it added that “strong fundamentals continue to underpin the UK market”.
“The recent depreciation of sterling, coupled with low interest rates, has attracted the attention of overseas investors to the UK, and with the spread between bond yields and property being the widest on record, the fundamentals of UK and continental European real estate remain attractive,” it said.
Jonathan Hull, managing director of investment properties, EMEA at CBRE, said: “Whilst investors have reacted cautiously to Brexit, the market fundamentals remain strong and investors still have significant capital to deploy.
“The uncertainty means that many investors will watch and see how the market develops before deciding how to act. However, sentiment is already improving as we enter a more stable political environment, and there are signs that the market is responding positively to this.”
Core property in Germany, meanwhile, remains highly regarded as a safe haven and sentiment remains strong, the consultancy said.
The office sector across Europe had the strongest quarter, seeing an 8.3% increase on Q1 2016, driven by a particularly strong performance in the Nordic region.
Investment volumes in France and Sweden, Europe’s third and fourth largest markets, were particularly resilient, with activity over the past year rising 32% and 20%, respectively. Q2 2016 results in both countries were boosted by buoyant office sectors.
Ireland also performed extremely strongly, transacting a record €2.3bn of commercial property deals in Q2 2016, more than double that of Q2 last year, although nearly half of that could attributed to the sale of the Blanchardstown Centre for close to €1bn.
Poland followed suit, transacting €1.5bn in the second quarter, over three times the level recorded in the same period last year.