Investment in European retail real estate reached EUR 8 bn in the first quarter (Q1) of 2010, outpacing office investment activity with a record-high 42% share of total turnover, according to the latest research from CB Richard Ellis (CBRE).
Investment in European retail real estate reached EUR 8 bn in the first quarter (Q1) of 2010, outpacing office investment activity with a record-high 42% share of total turnover, according to the latest research from CB Richard Ellis (CBRE).
In stark contrast to the performance of the overall commercial real estate investment market, which saw a 32% quarterly decline in Q1, retail activity was only slightly below the EUR 8.1 bn reported in Q4 2009.
Germany, Iberia and Norway saw the fastest growth in overall activity, with retail's share of Q1 investment well above 50% in all three markets. The resurgence in German retail investment was particularly strong with EUR 2.7 bn transacted, accounting for a threefold increase on the 2009 quarterly average turnover of EUR 870 mln. With a 33% share of the total, Germany became Europe's largest market for retail investment in Q1 2010, outpacing the UK where only EUR 2.1 bn was transacted.
CBRE said that the increase in retail investment activity across Europe reflects the growing number of larger lot size transactions completed in Q1 2010. Whilst Corio’s purchase of mostly German shopping centre portfolio has been the only EUR 1 bn-plus transaction this year to date, there was a reported increase in EUR 200 mln-plus deals that changed hands compared to the previous quarter, especially in the shopping centre sector.
This is partly influenced by the strategies of some investors to actively target larger lot sizes as a way of accessing the right product and, most importantly, a way of avoiding strong competition over assets at or around the EUR 50 mln mark, the report said.