Positive signs for large retail lot sizes: CBRE

Investment in European retail property reached EUR 5.1 bn in the third quarter of 2009, marking the end of the EUR 4.2 bn activity plateau reported in each of the three previous quarters. This brings total retail investment activity over the first nine months to EUR 13.7 bn - exactly a third of the total European commercial real estate investment during that period, CB Richard Ellis has reported.

CBRE said retail investment over the nine-month period was concentrated in a small number of markets, mainly the UK, Germany, Italy and Spain. At 64%, Spain delivered the highest retail share. This, however, was influenced by this year's first retail deal of more than EUR 1 bn - the EUR 1.15 bn sale-and-leaseback of BBVA’s mainly high street bank branches.

Reflecting the restricted financing conditions in the current market, shopping centre investment remained generally weak in 2009, CBRE said. However, there are signs that this is slowly starting to change. At least five EUR 100 mln-plus shopping centres changed hands in the third quarter of 2009 - all but one going to the German open-ended funds. These equity players - traditionally heavily invested in the office sector - are actively looking to diversify their portfolios, with a particular interest in shopping centres. In fact, of the total EUR 940 mln that the GOEFs have spent in Europe in Q3 2009, almost half was on shopping centres.