European Q3 property volumes rise to 5-year high: C&W

European commercial property investment has seen its strongest third quarter since before the crisis hit in 2007, according to Cushman & Wakefield.

Volumes for the third quarter of 2013 came to €36 bn, up 5.1% on the previous quarter and 17.7% higher than in the same period of 2012.

Retail volumes dropped 10% in Q3 while industrial transactions posted the best growth, up 19%.

Cushman & Wakefield's report predicts the final quarter - which has already seen strong activity - will deliver an annual volume of €145 bn.

According to Jan Willem Bastijn, head of capital markets EMEA at Cushman & Wakefield, said: 'There is now a real momentum building and the real estate sector is set to move quicker than most expect. The market is already going through the gears quickly; firstly we had demand moving into second-tier core markets, then we had demand in top tier cities in previously overlooked areas like southern Europe, now we have demand for better quality secondary assets in top cities.”

By country, the Czech Republic, Poland, the Netherlands, the UK and Ireland saw the better growth in activity in the past quarter and as demand has spread, values have stabilised. Yields are under pressure in more and more prime markets and while the fall to date has been limited - just 8 bps so far this year, lifting capital values by an average of 1.1% - the gains in leading markets have been greater and these improvements are expected to accelerate in the coming months.

'Where demand will spread next is not clear given how footloose some capital is in pursuit of the right product, but what does seem sure is that the pricing correction which has started is only going to accelerate and this will happen a lot sooner than many are predicting,' commented Bastijn.