Cross-border investment rebounds in Europe in Q2: JLL

Cross-border commercial real estate investment activity rebounded in Europe in the second quarter of 2009, signalling increased appetite from international and pan-European investors, according to Jones Lang LaSalle’s new European Capital Markets Bulletin. Cross-border investment accounted for 52% of total direct commercial investment volumes, up from a low of 27% in Q1 2009.

There was a particularly strong increase (169%) in activity from investors outside Europe, JLL said. Total direct investment in commercial real estate in Europe was EUR 12 bn in Q2, a similar level to Q1, and came to EUR 24 bn in the first half of 2009. The first-half figure marks a 42% decline on the second half of 2008, JLL said.

France recorded the largest increase in quarterly volumes in Q2, almost doubling investment activity to EUR 1.2 bn compared with the first quarter. Other major markets which witnessed an increase in second quarter trading were Italy, Netherlands, Spain and Sweden. Germany and the UK increased slightly. Belgium and CEE were among the markets which recorded lower Q2 activity.

Commenting on changes in investor types, Nigel Roberts, Chairman of EMEA Research said: 'German investors remained the largest net buyers in Europe in the first half of the year with net purchases of EUR 1.8 bn. Second largest were investors who source their capital at a global level, followed by Middle Eastern investors and then Russian investors. Reflecting a trend seen in the previous year, UK investors continued to be the largest net sellers in the region, typically disposing of their domestic holdings, with net sales of EUR 4.3 bn in the first half of 2009. UK investors were joined by Spanish and Dutch investors as the largest net sellers in Europe.'

Looking ahead to the rest of the year, Tony Horrell commented: 'London has demonstrated that demand can ramp up very quickly once investors gain confidence and markets re-price. Investors who are looking at Continental Europe should take note that, in the space of just a few months, the London market has become a very crowded one for the best buying opportunities. Paris is set to become the next market in Europe to see a mini investment rally. We are seeing a definite uptick in buyer enquiries in the French capital and the best assets generating interest from multiple parties.'