Aggressive bidding pushes up volumes in Q4: CBRE

Just under EUR 36 bn was transacted in the Europe commercial real estate investment market during the fourth quarter (Q4) of 2010, according to the latest data by CB Richard Ellis (CBRE).

This is by far the highest quarterly investment total since the first quarter (Q1) of 2008, and represents a 27% increase compared to the same period last year at (EUR 28.1 bn).

Two factors were most evident in driving this growth. One was the steady flow of large transactions completed, such as the EUR 1 bn plus Stratford City shopping centre sale in the UK, the Opernturm office deal in Germany and the EUR 475 mln sale of mixed-use asset Klara Zenit in Sweden. However, it was the aggressive bidding by investors in core property that had a more profound effect and broader impact across the markets.

Investment activity in Europe has picked up significantly in the last six months, but has been concentrated only in a handful of markets. Germany, France and Sweden were the main beneficiaries, together accounting for more than EUR 15 bn of transactions in the final quarter of 2010, twice as much as their combined total in Q3 2010. As a result these three markets together accounted for 42% of the European investment total in the final quarter, the highest proportion since Q4 2007.

Michael Haddock, director of EMEA Capital Markets Research, CB Richard Ellis, commented: 'The UK was the first market to recover in this cycle, but activity appears to be reaching a plateau. Investor interest has been shifting to the most liquid of the other European markets, Germany, France and Sweden. It is also significant that these are the countries where the economic fundamentals are strongest.'