Germany has overtaken the UK as Europe’s largest retail market, driving the region to near-record levels of investment in Q3 2015, according to research by CBRE.
Germany has overtaken the UK as Europe’s largest retail market, driving the region to near-record levels of investment in Q3 2015, according to research by CBRE.
The third quarter was Germany’s strongest three-month period since 2006, while the Nordic markets also recorded strong increases, particularly in Stockholm and Oslo.
The total retail investment volume was €17 bn, a 45% increase on Q3 2014 levels. Shopping centres remain the preferred sector for cross-regional investors, with retail warehouses accounting for 24% of the overall amount.
John Welham, head of European retail investment, said: ‘The German and Nordic markets have had an exceptional quarter. In Germany the growth was largely the result of an increase in activity by domestic purchasers. Local buyers invested €3.2 bn in the country, up 167% on the previous quarter.
‘For the Nordics, attention was focussed on the high street offering in Oslo, the supermarket sector in Finland and domestic purchasers favouring retail warehouses and shopping centres in Sweden.’
The UK fell behind Germany despite a 12% increase in investment volume from Q2 to Q3, reaching €4.3 bn.
The CEE region recorded its strongest quarter in four years, with a retail investment volume of €1.2 bn, following several consecutive weak quarters.
Yield compression was experienced in all markets, with the CBRE EMEA Rental Yield Index down by 39 bps year-on-year. Yields fell faster outside the eurozone than within it, most strongly in the Czech Republic, with sharp falls also in France, Portugal, Norway and Ireland.
Prime high street retail rents were up by 0.5% against the previous quarter and have risen 6.7% year-on- year.