Growth in European commercial real estate investment turnover is being driven both by a notable increase in the size of transactions and a sharp rise in the number of transactions being completed, according to a forthcoming report by CB Richard Ellis. The number of transactions completed in Q4 2009 rose by 67% compared with the bottom of the market in Q1 2009, and there are already examples of properties bought then which are being retraded at a substantial profit.

Growth in European commercial real estate investment turnover is being driven both by a notable increase in the size of transactions and a sharp rise in the number of transactions being completed, according to a forthcoming report by CB Richard Ellis. The number of transactions completed in Q4 2009 rose by 67% compared with the bottom of the market in Q1 2009, and there are already examples of properties bought then which are being retraded at a substantial profit.

The latest CBRE research shows that there has been a significant increase in the average lot size of transactions during the course of 2009. The low point in terms of lot size coincided with the nadir in the total value of transactions in Q1 2009, when the average transaction size was just EUR 16 mln. However, since then, the combination of the recovery in values and the ability of investors to complete larger transactions has driven this average up to EUR 23 mln in Q4 2009.

Particularly notable has been the growth in activity at the very top of the market. Only eight transactions larger than EUR 200 mln were concluded in the first half of 2009, with a total value of just EUR 3.5 bn. In contrast, the second half of the year saw 24 transactions for over EUR 200 mln, with a total value of over EUR 9 bn.

However, despite this recent recovery, large transactions remain much rarer than they were at the peak of the market in Q3 2007, when the average deal size was EUR 49 mln and that quarter alone saw 62 transactions for more than EUR 200 mln.