Retail property volumes top €10b in H1 2013

Widening activity across Europe's retail real estate investment markets pushed volumes beyond the €10 bn mark in the first half of 2013, according to Jones Lang LaSalle.

Investment volumes reached €5.1 bn in Q2, in line with the previous quarter but up from the €4.1bn recorded in Q2 2012, the adviser's research shows.

At €10.3 bn, half-year investment volumes were up by over 40% on the €7.3 bn recorded in the first half of 2012. Increased transaction volume, JLL said, is being driven primarily by the increased availability of stock on the market, which is helping to satisfy the latent investor demand for European retail assets.

Whilst the traditional powerhouse markets of the UK, France and in particular Germany, continue to see healthy investment activity, there is a broadening of investor horizons across Europe. Sweden, Poland, Italy, Portugal, Slovenia and Austria, as well as Russia and Turkey, all had active quarters.

Demand is becoming increasingly diversified and focussing on regional locations as well as capital cities as investors place greater emphasis on property fundamentals JLL said. This is highlighted by the purchase of Silesia City Center in Katowice by an international consortium led by Allianz Real Estate, for €412 mln. This is one of several large transactions in the Polish market which were signed during the quarter, but which are expected to complete in the third quarter.

Elsewhere, one of the biggest transactions in Q2 was also carried out by Allianz Real Estate which purchased a 50% stake in a portfolio of seven shopping centres across Austria, Slovenia and Northern Italy, in a new joint venture with SES Spar European Shopping Centers.

Other key deals include the first foray into the UK retail warehouse market by North American investor KKR through the acquisition of a 40,000 m2 retail park portfolio from Resolution Property for €130 mln, in partnership with asset manager Quadrant Estates. Both deals reinforce the continuing trend of joint venture partnerships in the retail sector.

Jeremy Eddy, director of European retail capital markets at JLL, commented: 'We are seeing a greater presence in the market of opportunistic investors. With an increase in the amount of debt available to the property market, we expect further activity by these investors in the second half of the year.'