Domestic players propel European retail volumes

Local buyers are returning to the European retail property investment market in 2013, driving strong growth in the sector, new research by CBRE reveals.

European retail investment activity reached €7.9 bn in the first quarter of 2013, a 26% increase on the same period in 2012. This follows a record post-Lehman high in Q4 2012 when €13.4 bn was transacted.

Investors remain largely risk-averse and are focussing their strategies on core Western European markets. However, this focus is starting to present a number of challenges such as lack of desired product, intense competition and pricing, CBRE said.

While cross-border buyers accounted for around 35% of the European retail investment market, the latest results show a notable increase in activity from local players, accounting for approximately 65% of the market. In the most active markets, Germany and the UK, local buyers accounted for 82% and 80% respectively of total transactions by value.

John Welham, head of European retail investment, said: 'With international capital expected to remain plentiful, certainly in Western Europe, increased activity by local players will help to boost overall retail property investment levels. Local and international buyers tend to seek very different product in terms of lot size and this changing trend will ease some of the issues of product availability that have restricted activity in recent years.'