Retail accounts for quarter of European deals in first nine months

Retail transactions totalling EUR 6.2 bn were completed in Europe during the third quarter of 2008. Germany, the UK and the Nordics were the most active markets, together accounting for almost 70% of completed deals by value, according to John Welham, head of European Retail Investment at CB Richard Ellis.

During the first three quarters of 2008, retail property totalling EUR 24.3 bn in value was traded, representing 26% of the market as a whole. Nearly a quarter of European markets experienced an increase in retail investment volumes compared to the same period in 2007. 'Although there is great polarisation between the prime and secondary segments of the retail investment market, the prime end is certainly demonstrating that the right asset in the right location is still considered a sound investment,' Welham says.

In its retail outlook briefing to be presented at the Mapic retail real estate fair in Cannes, CBRE indicates that it expects quality retail property to continue to appeal to major investors through the current market downturn. The broker says prime retail assets - particularly shopping centres - are still sought after and 'good defensive investments amidst the global economic downturn'.

Welham: 'Where quality shopping centres have become available this year, investors have shown they are still prepared to acquire in the knowledge that they would not have the opportunity to buy these attractive assets in stronger markets. And there are many reasons to believe that good quality retail property will outperform other real estate sectors in the current market.'

European retail property continues to attract the attention of major investors due to a number of factors, according to CBRE. These include constrained supply, a diversified tenant base, very low vacancy rates and security of income.