European real estate investment hits decade low
Investment into commercial real estate in Europe is off to its slowest start to the year in more than a decade, but analysts at CBRE expect a turnaround during the second half.
Deal flow stood at €37bn (£31.7bn) over the first three months of the year, according to a report published this week by the agency. That figure is down 7% year-on-year and makes for the worst opening quarter since 2013.
Nonetheless, the agency said the bottom of the market seems in sight, noting that the decline in deal volume “continued to decelerate” and some markets delivered “a positive showing as investor confidence gradually returns”.
Investment into commercial real estate in Europe is off to its slowest start to the year in more than a decade, but analysts at CBRE expect a turnaround during the second half.
Deal flow stood at €37bn (£31.7bn) over the first three months of the year, according to a report published this week by the agency. That figure is down 7% year-on-year and makes for the worst opening quarter since 2013.
Nonetheless, the agency said the bottom of the market seems in sight, noting that the decline in deal volume “continued to decelerate” and some markets delivered “a positive showing as investor confidence gradually returns”.
The biggest highlights came from industrial and hotels investment, up by 45% and 16% respectively year-on-year. Offices were down by 9%, while living investments dropped by more than a third.
Some €11.5bn was invested in the UK, a drop of 7% year-on-year and taking the trailing 12 months total to €48.4bn, down by a fifth.
“Investment sentiment has improved markedly since last year, and there are more willing buyers and sellers in the market,” CBRE said. “Although we expect the recovery to be gradual, there is growing pressure on investment managers to deploy capital after two years of inactivity, while some borrowers will be motivated to sell before their loans reach maturity.
“In 2024, we expect investment volumes to increase by 10% compared with 2023, with activity skewed towards the second half of the year, after the first rate cuts by the ECB and the Fed lead to improved investor confidence.”
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