UK sees highest quarterly investment total since 2007

UK commercial real estate activity in the third quarter reached levels that have not been seen since 2007, with over €14 bn worth of transactions compared with €11.4 bn in Q2 2013.

The trend in the UK is in line with the rest of Europe which has seen a major pick-up in investment activity, according to the latest research published by CBRE.

'Europe had an impressive third quarter in terms of investment activity and this trend is expected to continue in the final quarter of 2013,' commented Jonathan Hull, head of EMEA Capital Markets, CBRE. 'While core markets remain strong, with the UK showing remarkable levels of investment in Q3, sentiment continues to improve in Europe’s recovering markets such as Ireland and Spain. There is greater risk appetite in the real estate investment community, with many private equity groups seeking high yielding opportunities.'

Total investment reached €35.7 bn in Q3 2013 - an increase of 21% on the same quarter last year. This is also the highest quarterly total since Q1 2008, excluding the Q4 spikes of year-end investment activity.

Led by improving economic conditions and increased investor interest, significant growth in real transactional activity is apparent in Europe’s recovering markets, namely Spain and Ireland. Over the past 18 months, Ireland in particular has seen a significant increase in investment levels.

In Q3 2013 Ireland saw investment reach €462 mln, compared to just €102 mln in the same quarter last year, while the last 12 months have seen €1.3 bn worth of transactions. Marie Hunt, executive director, research, CBRE Ireland, commented: 'The volume of transactional activity in the Irish commercial real estate market in 2013 surprised many. We expect to see a similar volume of transactional activity occurring in 2014.'

Also with €1.3 bn worth of transactions in Q3 2013, investment in Spain is more than double the level seen in Q3 2012 at €531 mln.