Retail property investment activity is increasingly following Europe's stronger and faster growing economies such as the Nordics, Germany, Poland, and Russia, according to the latest data from global real estate adviser CB Richard Ellis (CBRE).

Retail property investment activity is increasingly following Europe's stronger and faster growing economies such as the Nordics, Germany, Poland, and Russia, according to the latest data from global real estate adviser CB Richard Ellis (CBRE).

Retail property investment in Europe reached EUR 20.1 bn in the first half of 2011, accounting for 37% of commercial real estate investment, well above the long-term average of 28%. The retail sector has attracted a wide range of buyer types, including many retail specialists such as listed property companies, as well as more general institutional investors. Strong demand from non-specialist investors, especially those from the Middle East and Asia has also provided a significant boost to retail investment activity.

The growing divide in economic performance across Europe and the re-emergence of sovereign debt issues is becoming a greater concern for retail property investors. Even more so than in the recent past, retail investment and pricing has closely followed economic performance, with investors focusing on the faster growing economies such as those in the Nordic region, Germany, Poland, and Russia.

This contrasts with decreased activity in the UK. While still commanding the lion's share of activity, its overall share of the European retail investment market fell to 36% in H1 2011, well below the historic average of 45%. Weak economic growth and falling consumer confidence have fed through into limited growth in the retail investment market in the UK, with activity falling to under EUR 2 bn in Q2 2011 - half the long-term quarterly average and a level only slightly above the quarterly activity seen at the bottom of the market in late 2008.

In contrast, Germany, underpinned by strong economic and occupier market fundamentals, grew to 31% of the retail investment market at EUR 6.2 bn, with investor interest spreading into second-tier markets, and in some cases towards more 'value-add' assets.

Poland became the third most active retail investment market in Europe in H1 2011, with EUR 1.2 bn transacted.