Markets with ‘robust’ industrial and multifamily sectors have helped lead European real estate investment volume to €70bn in Q2 2021.
Chris Brett, head of EMEA Capital Markets, said: ‘There has been a marked recovery in investment volumes across Europe. Countries that are more reliant on the office sector have generally demonstrated less of a bounce back than markets with robust industrial and multifamily sectors. Our expectation is that European investment volumes will continue to recover during H2, and for the full year will improve by up to 5% on the 2020 performance.’
Data from the property services giant was released on Tuesday this week.
The advisor called the UK the ‘standout market’ because investment activity saw a 279% increase on the same period last year, with investment totalling €16.8 bn.
Germany also bounced back strongly in Q2, with €17.8 bn of total investment activity, up 27% on Q2 2020. Other markets which showed positive recovery in Q2 included Denmark, Norway, Spain and Sweden.
However, for the half year, deal volume was down even on H1 2020 when the pandemic struck, perhaps due to deals being agreed before Covid-19 but subsequently completed.
The total European figure for deal volume in H1 2021 was €125.6 bn, which is a 9% decrease from €138.7 bn for the same period in 2020. Nevertheless, CBRE said an overall positive trend was emerging, when factoring in that Q1 2020 was pre-Covid and the highest Q1 on record for the European Real Estate market.
Looking at the sector figures, the rise in e-commerce, which has been a catalyst for low vacancy rates and strong demand, has caused the industrial sector to continue to perform well across Europe. Industrial volume rose 64% in H1 2021 in comparison to the same period last year, with investment reaching €25.4 bn.
As governments re-opened their economies and a return to offices increased, investment into the office sector rose 37% in Q2 2021, reaching €22 bn in Europe, including the UK. Significant bounce backs during the quarter were seen in some of the major markets, including UK (up 300%), Spain (up 249%) and Germany (up 67%).
With the partial lifting of travel restrictions in Europe, hotel investment volumes have also shown signs of recovery, rising 9% in H1 2021 to €6.4 bn on the same period last year. This activity was principally driven by Italy, France, UK, Germany, and Spain.
In the residential investment sector, half-year investment volumes reached €28.3 bn, down 26% on the same period last year. Investors are still showing interest in the multifamily housing sector across Europe, with increasing global capital targeting the sector and investors seeking platform acquisitions to build scale.