European retail investment hits EUR 6.6bn in Q2

Retail real estate in Continental Europe attracted total investments of EUR 6.6 bn from April to the end of June this year, compared to EUR 5.5 bn in the same period last year, according to figures released by global property adviser Jones Lang LaSalle.

But due to a relatively subdued first quarter this year, in which EUR 3.4 bn traded, the total of EUR 10 bn for the first half of 2007 was lower than the EUR 11.1 bn invested in the same period in 2006.

Jeremy Eddy, director of European Retail Capital Markets at Jones Lang LaSalle said: 'In the first half of the year investor focus has been on several major transactions that completed in the second quarter or are due to complete in the third quarter. We are seeing continued strong competition for prime assets and assets with value-add opportunities and we expect total transaction volumes for 2007 to be similar to the record levels achieved in 2006 (EUR 26 bn). There has also been further yield compression in the first half which has set new benchmarks, despite the backdrop of rising finance rates.'

Germany remains the prime area for activity - EUR 4.3 bn was spent there in the first half or 40% of the total volume. As in 2006, Germany saw several record deals in H1. The largest one was the purchase of 133 Marktkauf properties by REWE for an estimated EUR 950 ml. The second largest is the purchase of around 37 Hellweg (DIY) properties by W.P. Carey for around EUR 345 mln.

France, the second largest investment market across Continental Europe, saw two large retail warehousing portfolio transactions above EUR 200 mln. Foncière des Murs purchased two retail warehousing portfolios - 102 Forum de Grammont properties for around EUR 316 mln and the Parc D'Activite Commerciale Des EMAUX for approximately EUR 242 mln, which included 57 retail properties, JLL said.