GLOBAL - European property markets saw something of a renaissance in the office sector, while general activity remained sluggish, according to a recent study by Cushman & Wakefield (C&W). 

The study found that investments in the European property market totalled €26.2bn in second quarter - an 11.5% decrease compared with the first quarter.

The report also found that trends were far from uniform, with offices up and other sectors teetering.

While the retail and the industrial sectors fell by 35% and 46%, respectively, the office market increased by 10%, jumping from 36.8% in the first quarter to 46.2% in the second.

C&W attributed this surge to the fact the economic picture had generally become more favourable for offices - "investment spending by companies is rising and recruitment is up".

C&W attributed the drop in retail to the fact that fewer large deals were completed relative to the first quarter.

"What's more," it added, "while much of corporate Europe is not in such a bad shape, consumer expenditure will face pressure for some time to come, and this will hold back some areas of the retail market."

In terms of geographical spread, the UK, France and Germany have largely maintained their market share at 64%, but other countries in Europe have performed well, with Sweden, Norway and Finland recording strong demand from investors.

C&W's report also showed that investors are mainly focused on prime markets as they look to reduce risk. It said the best long-leased stock might yet see yields fall further as a result.

However, while secondary demand is weak, C&W said some investors were now ready to take a calculated risk to achieve higher returns - on occupancy levels or development, for example.

It said the third quarter would be disrupted by current events, but that it expected some pick-up in activity later this year as more property came to market.

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