Retail real estate transaction volumes in Europe rose nearly 60% to EUR 4.5 bn in Q4 2009, with the number of deals up to 100 from 66 in Q3 2009, according to Jones Lang LaSalle. However, full-year total volumes in 2009 fell 32% to EUR 12.3 bn compared with 2008.

Retail real estate transaction volumes in Europe rose nearly 60% to EUR 4.5 bn in Q4 2009, with the number of deals up to 100 from 66 in Q3 2009, according to Jones Lang LaSalle. However, full-year total volumes in 2009 fell 32% to EUR 12.3 bn compared with 2008.

As the high cost and lack of access to finance continued to restrict the market, volumes in Continental Europe reached EUR 7.3bn, a year-on-year decline of over 40%. However, towards the end of 2009 activity picked up with total volumes in Q4 2009 reaching EUR 2.5bn from 65 transactions, almost 40% higher than Q3 2009.

As predicted by Jones Lang LaSalle in 2008 the UK, Germany, Italy and France continued to dominate the retail investment market in Europe, with each country seeing over EUR 1 bn worth of deals transacted. The UK witnessed the greatest amount of activity in Q4 with over 40 deals raising EUR 2bn, almost double the level reached in Q3 2009. Two of the most significant transactions were Tesco sale of a portfolio of supermarkets to a UK pension fund for EUR 427 mln and the sale of Silverburn shopping centre in Glasgow for EUR 328 mln.

With four deals totalling over EUR 100 mln in 2009, Germany was the most active market in Continental Europe securing a 21% share of total volumes transacted. Deals such as the sale of a stake in the Thier-Gelände shopping centre in Dortmund for EUR 225 mln and the Mercado shopping centre in Hamburg for EUR 164 mln, highlight the relatively robust domestic market. France and Italy both saw a total volume of approximately EUR 1.2 bn during 2009, with France reporting just over EUR 500 mln in Q4 (including the EUR 115 mln portfolio of Decathlon stores).

Shopping centres remained the principal target for investors in 2009 with a continued focus on prime product in core Western markets. Continental Europe accounted for 66% of total volumes or EUR 4.8 bn, compared to 55% in 2008 or EUR 6.8 bn. Conversely retail park investment declined considerably from EUR 2.5 bn in 2008 to EUR 526 mln in 2009 reflecting a lack of high quality stock and the higher cost of finance.

Institutional investors were the most active group across Europe in 2009, accounting for almost a quarter of the total volumes traded. In Continental Europe, funds continued to drive the market with EUR 1.8 bn transacted, of which Germany accounted for over EUR 0.5 bn. The largest investor was Union Investment. The principal vendor group in Europe during 2009 were unlisted developers and property companies looking to recapitalise their balance sheets who accounted for sales of EUR 2.9 bn, a quarter of 2008’s total volume.