The average quarterly investment volume over the last four quarters across Europe rose 12% from 15.4 bln. to 17.2 bln, maintaining the growth momentum of 13% seen over Q4 2009, reports global real estate advisor, DTZ, in its Q1 2010 European Investment market update.
Commenting on the figures, Magali Marton, Head of CEME (Continental Europe and Middle East) Research, said: "In Europe's major markets, Germany grew its share of activity, as volumes rose 32% from 3.6 bln. in Q4 2009 to 4.7 bln. in Q1 2010. In contrast, however, volumes were disappointing in the UK and France, where activity fell by 48% and 56% respectively as investors were frustrated by a relative lack of opportunities in the market place."
Despite the improved optimism, risk aversion remains evident across Europe with investors remaining focussed on their home markets and accounting for 62% of activity. Just 5% of transactions were accounted for by non-European investors, well below the 25% proportion seen at the peak of the market.
Magali Marton said: "Retail grew its share of overall activity to 44%, compared to 27% last quarter. The growth has been primarily driven by an increase in shopping center sales, which accounted for 25% of European investment in Q1."
The sale of a multi-country portfolio of shopping centers for 1.3 bln. to Corio, boosted volumes this quarter. Offices saw their share of activity slip back to 37%, compared to 54% last quarter. Excluding the Corio deal, both offices and retail accounted for roughly 40% each of total volumes.
As occupier markets remain weak and uncertainties remain over the sustainability of the economic recovery, a number of investors are biding their time in making decisions. Marton concludes: "Despite the first quarter lull, there are signs, at least in the UK, of a willingness for investors to bring key assets to the market to take advantage of the current pricing and the relative strong demand for product. Opportunities are also likely to emerge from the growing level of loans up for refinance in the coming years."