POSITIVE SIGNS FOR FRANCE AS COMMERCIAL REAL ESTATE INVESTMENT ACTIVITY RAMPS UP Total European commercial real estate investment increases 28% y-o-y UK investment outside Central London continues to outpace the capital France sees investment levels double compared to Q2 2013
€12.5 BILLION OF EUROPEAN RETAIL INVESTMENT IN Q2 2014 DRIVEN BY LARGE LOT-SIZE AND PORTFOLIO DEALS European retail investment jumped to €12.5 billion in Q2 2014, up 72% on the same quarter last year and 26% above the 3-year quarterly average. Overall, H1 2014 posted the highest H1 total since 2007 with over €22 billion transacted. Large lot-size and portfolio deals drove retail investment activity particularly in France and Iberia, both of which recorded large increases over their 3-year quarterly averages. Investor demand for retail assets improved through the first half of 2014 with many new buyers entering the market, particularly from the US. Strong competition and lack of quality product have led to further yield compression across both high street retail and shopping centres.
Against a backdrop of economic recovery and employment growth, all major city prime office markets are expected to see a return to rental growth, with European average prime rents expected to register modest growth of 2.9% per annum over the next 5 years. The expectation of rental growth, improvement in financial conditions, and increased investor confidence should be sufficient to offset the impact of rising government bond yields at least for the next two years. Prime office markets in Central and Eastern Europe and some Eurozone peripheral countries are forecast to be the top performing cities in terms of total return.
EMEA Rents and Yields MarketView Q2 2014
