Central Paris attracted €15.6 bn of real estate transactions last year, making it the number one office investment market in Europe for the first time in the past 10 years, according to a report realeased by BNP Paribas Real Estate at Mipim.
Central London was hit by Brexit jitters and slipped from first to second place with a volume of €15.3 bn.
In Paris volumes fell 6%, which the report says, was to be expected following 2015’s cyclical high, yet business is sustained and healthy. London saw a 26% fall in investment volumes.
The four main German markets totalled close to €15 bn of office investment. They all generated increases except Berlin, which declined after reaching an historic high in 2015. Milan and Madrid ended 2016 down 16% and 7% respectively, after recording unprecedented figures in 2015. Triple-digit growth was observed in Prague, Rome, Copenhagen and Warsaw. Amsterdam’s investment market was underpinned by strong economic fundamentals, boosting office investment volumes that rose 68% year-on-year.
In the wake of a record year in 2015, European commercial real estate investment volumes totalled €230 bn in 2016, down 10% on the year before but remaining at historically high levels. Offices represented 46% (€106 bn) in 2016, a rise on the 44% seen in 2015, at the expense of a 6% drop in volumes.
Céline Cotasson-Fauvet, head of European analysis at BNP Paribas Real Estate, said: 'The share of foreign investors declined in 2016 of which American investments were the most impacted. This shift is not entirely surprising as American investors have predominantly focused on the opportunistic and value-add end of the risk curve. These opportunistic funds have found scarcer opportunities in the markets where they have been particularly active in the last couple of years.'
