European cross-border activity plunged significantly last year as investors focused on their home markets, a recent report by CB Richard Ellis has said.
European cross-border activity plunged significantly last year as investors focused on their home markets, a recent report by CB Richard Ellis has said.
'The key trend in 2008 was the decline in cross-boarder activity, which fell to less than half of the total value transacted,' the broker said. The decline in cross-border investment was particularly evident in the second half of the year, when cross border acquisitions shrunk to below a third of the total investment in the three main markets of Europe - the UK, Germany and France.
European investment fell by 53% year-on-year to EUR 117 bn in 2008. The slowdown was registered across 24 out of the 25 countries covered by CBRE's research. Russia was the only country to report similar investment activity over 2007 and 2008, CBRE said.
'The slowdown was evident in all markets across the CEE region, with year-on-year activity falling everywhere. The only exception to this trend was Russia, where activity was on-a-par with 2007 levels, with EUR 3.3 bn transacted, however, Russia is already seeing similar pattern as we see in major markets in Western Europe with the likelihood of deteriorating further in the course of 2009. One of the effects currently visible on the market is significant pressure on rents,' commented Pavel Schanka - director of CEE Capital Markets at CBRE.
He added: 'The core CEE markets were amongst the most affected, with turnover in Hungary and the Czech Republic falling by 79% and 60% year-on-year respectively. Although activity slowed in Poland too, the fall was less rapid.' Despite lower investment volume and further risk re-pricing in CEE, Czech Republic an Poland will most likely remain the most liquid markets in the CEE region.
