Retail property to outperform other sectors in downturn - CBRE

Retail deals featured prominently among Europe' s largest property transactions in 2008, including two of the four European investment deals over EUR 1 bn, according to CB Richard Ellis' latest Retail Investment MarketView.

'There are reasons to believe that quality retail property will outperform other real estate sectors in the downturn, as retail property, particularly prime retail, has historically seen lower vacancy rates than other sectors during economic downturns,' CBRE said.

Although total European retail investment activity fell by 45% in 2008, in line with other areas of the commercial real estate market, cross-border activity within the retail sector held up well, comprising more than 50% of all activity, CBRE said. The shopping centre investment market also maintained its highly international nature, with 66% transacted by foreign buyers, a slight increase on 64% in 2007.

By nationality, UK, French, Dutch and American investors were the most active buyers of retail real estate in 2008, making up 56% of all cross-border retail deals, CBRE said. The most significant change in the top four international investors last year was the significantly reduced activity of the Irish, who were replaced by French investors. They expanded from EUR 1.2 bn of retail acquisitions in 2007 to EUR 2.7 bn in 2008.