Commercial real estate investment volume fell to EUR 23.1 bn in Q3 from EUR 24.6 bn in the previous quarter, according to research from CB Richard Ellis. Despite the fall, the longer term trend appears to be steadily upwards, the adviser said. ‘Investor demand remains heavily concentrated at the prime end of the market, a trend that we expect to continue in the mid-term.’
Commercial real estate investment volume fell to EUR 23.1 bn in Q3 from EUR 24.6 bn in the previous quarter, according to research from CB Richard Ellis. Despite the fall, the longer term trend appears to be steadily upwards, the adviser said. ‘Investor demand remains heavily concentrated at the prime end of the market, a trend that we expect to continue in the mid-term.’
With interest in poorer quality properties remaining very weak, the yield gap between prime and secondary is now at a record high and should start to narrow again once the economic outlook is more certain, the adviser added. At the moment the areas with the greatest investor demand are Germany, the Nordic region and Central and Eastern Europe (particularly Poland). In addition to strong GDP growth, Germany and the Nordic region are also benefiting from the market’s uncertainty about the planned government spending cuts in some European countries.
‘Cuts on this scale have not been seen before, and so forecasters are struggling to determine their likely economic impact. Under such circumstances, those countries where cuts will be smallest look increasingly attractive.’
