DTZ Research has released its Investment Market Update report for Europe, Q4 2014.
European commercial real estate investment totaled a record EUR65bn in Q4 which led to a 29% increase in full year volumes of EUR186bn.
Magali Marton, Head of EMEA Research at DTZ, says: “Strong double digit growth was recorded in all markets over the year with the UK, Germany and France accounting for 70% of activity in the year. However, the strongest growth was seen in the peripheral markets (Ireland, Italy and Spain) where volumes grew 93% over the year to EUR15.5bn. Benelux markets, notably the Netherlands, also benefitted from a strong 83% increase in activity to EUR11bn.”
Offices continued to drive investment activity across Europe with 44% of market share, but the industrial segment has shined with volumes reaching a new record of EUR21bn in 2014 driven by strong demand from warehousing/ logistics space, especially across Central and Eastern Europe markets.
Both domestic and overseas investment in European real estate has increased, however overseas investors have been the biggest driver of activity. Investment reached a record EUR56bn in 2014, itself a record share of 30% of total investment.
Nigel Almond, Head of Capital Markets research at DTZ, says: “Asian investors have remained active in Europe and increased their investment, but the biggest growth has been the return of US investors who deployed EUR8bn of capital in Q4, similar to the level of investment in the previous three quarters combined. Activity was not restricted to the traditional hot spots of the UK and Germany, but also Spain, the Netherlands and the Nordics”.
Unlisted funds have continued to dominate investment adding a net EUR20bn in 2014. Although listed companies were net sellers over the year, as a whole, 2014 was a year of two halves. H1 was characterised by net sales, which turned positive in H2 and this is a trend we expect to continue.
Magali Marton adds: “We remain confident of the outlook for Europe’s markets during 2015. Good relative value in the majority of Europe’s markets combined with a strong weight of new capital chasing opportunities across the region will lead to further growth in volumes which are set to reach at least EUR210bn in 2015.”
