Direct investment in European real estate reached a record EUR 242.2 bn in 2006, up 39% on the year before, according to Jones Lang LaSalle's latest European Capital Markets Bulletin. This figure represents the biggest volume increase (EUR 68 bn year on year ) ever recorded.
Direct investment in European real estate reached a record EUR 242.2 bn in 2006, up 39% on the year before, according to Jones Lang LaSalle's latest European Capital Markets Bulletin. This figure represents the biggest volume increase (EUR 68 bn year on year ) ever recorded.
While the majority of European countries saw their investment volumes increase, the big three - France, Germany, and the UK - continue to dominate, accounting for 64% of total volumes. The volume in France rose 67% to EUR 24.1 bn and by 141% in Germany to EUR 49.5 bn. In contrast, the volume in the UK was static in 2006 at EUR 80 bn.
Volumes in Central and Eastern Europe more than doubled to EUR 13.3 bn, with Russia emerging as the second largest market in the region. Its volume rose 700% to EUR 3.4 bn, behind Poland's EUR 5 bn. 'Volumes are also up over 70% in Poland to EUR 5.1 bn as investors move further east and up the risk curve in search of growth and value opportunities,' the report said.
Strong levels of investor demand continue to be an important factor in 2007. 'Investors in European real estate in the past couple of years have been rewarded with record returns. Demand continues to be fuelled by investors up-weighting their allocations to real estate, which have outperformed equities and bonds over the last one, three, five and 10 years,' said Tony Horrell, ceo of European Capital Markets at JLL.