European volumes increasing despite Q3 dip: DTZ

Investment in commercial real estate across Europe in the first nine months of 2010 has reached EUR 63.6 bn, surpassing last year's total volume of EUR 62.4 bn, according to DTZ Research.

The property adviser's latest Investment Market Update report estimates European investment volumes will reach EUR 89 bn by the end of 2010, a 42% increase on 2009.

Launched on Tuesday the report highlights an average increase in European investment volumes over the last four quarters to EUR 21.8 bn. This is despite a third-quarter decrease of 8% to EUR 21.2 bn from EUR 23.1 bn in the second quarter of 2010.

Tony McGough, Global Head of DTZ Forecasting & Strategy Research, commented: 'Although European investment volumes are down in the last quarter, the underlying trend is one of growth and we expect to see this continue next year with a further increase in investment activity. As seen in our recent ‘Great Wall of Money’ report, Europe remains the main target for capital investment with increasing levels of activity expected from overseas investors. As a result, we expect European investment volumes to reach EUR 109 bn in 2011, a 21% increase on our forecast of EUR 89 bn for 2010.'

Within the major European markets, France and Germany registered an increase in investment volumes over the third quarter. In France, volumes increased by 7% from EUR 2.2 bn to EUR 2.4 bn. In Germany, there was an increase of 3% from EUR 3.8 bn to EUR 3.9 bn. Furthermore, volumes in Central and Eastern Europe rose by 43% although from a much lower base, increasing from EUR 600 mln to EUR 800 mln. In contrast, other major markets saw a decline in volumes with the UK falling 6% from EUR 9.6 bn to EUR 9 bn.