Real estate trading activity in continental Europe increased by 12% in the first quarter of the year, according to new research from CBRE, despite the uncertainty generated by general elections in several notable markets.
'Continental European markets continued to perform strongly in the first quarter of 2017 with investors paying premium pricing for the highest quality product. Germany has been a primary focus for core property assets and is likely to continue to be seen as safe haven for global capital,' commented Jonathan Hull, managing director of investment properties, EMEA at CBRE.
Year on year, the deal volume reached €38.9 bn in Q1 2017, with €12.6 bn traded in Germany alone. German volumes continued their impressive growth trajectory from the end of 2016, rising 49%, and almost compensating for the fall in UK investments.
British real estate deals dropped 25% as uncertainty surrounding the exit from the European Union continued to bite, dragging down total European deal volumes for the first quarter to €53.9 bn, compared to last year's €54.7 bn.
In comparison, Czech Republic, Hungary, Spain and Sweden all had a record first quarter, whilst France, which experienced a calmer Q1 reflecting a similar trend to previous years, may benefit from strong demand for exposure to gateway markets in the remainder of the year once investors have more clarity on the election results, CBRE suggested.
Despite the reduced trading volumes in the UK, CBRE said that the first quarter of the year nevertheless represented the second consecutive quarter where a recovery in the UK market was evident following a decrease in volumes connected to the Brexit vote.
'Sentiment in Central London remains very positive with overseas buyers, notably from Asia dominating the market, particularly for larger assets. The upturn we have seen in Central London should, in turn, have a positive impact on demand for the UK regions.' concluded Hull.
