European retail property volumes down in H1 2012: JLL

Retail real estate investment picked up in Q2 2012, following the subdued volumes experienced in Q1, Jones Lang LaSalle has said.

The property adviser’s preliminary analysis suggests that direct investment in retail real estate for Q2 is EUR 3.9 bn, a 29% increase on the Q1 2012 volume of EUR 3.1 bn. However, volumes in the first half of 2012 will be EUR 7 bn, down from EUR 15.3b n in H1 2011, and below the H1 five year average of EUR 10.3 bn.

Geographically, as in Q1, the majority of activity remains focused on the large, liquid markets of Germany and the UK which together transacted just over 50% of total volume. Germany accounted for almost half of deals over EUR 100 mln, including the purchase of the Europa Galeria in Saarbrücken by Union Investment from Credit Suisse Euroreal, for EUR 173.5 mln and Unibail-Rodamco's EUR 190 mln acquisition of a 50% stake in Ruhr Park in Bochum.

Anke Kaukars-Haverkamp, head of shopping centre investment Germany commented: 'Germany is still high on the wish list of investors, and quality product with strong fundamentals continues to attract significant attention from numerous equity sources but the main brake acting on the German shopping centre investment market is the limited availability of core product. Several parties are looking to enter the market or expand their platform, as witnessed by Unibail-Rodamco’s strategic acquisition of a majority stake in Perella Weinberg’s JV holding in mfi AG, Germany’s second largest shopping centre group.'

'Looking forward, there are several large transactions pending across Europe and new product is expected to come to the market, as the fundamentals of retail real estate investment remain intact. We therefore anticipate more activity in the second half of the year, mostly in Germany, the UK and Poland. However, last year’s total investment volume of €31.6bn is unlikely to be repeated; our revised estimate for 2012 is that volumes will not exceed EUR 20 bn.'