European real estate investment increases 20 pct to €157,5 bln

€55 billion was invested in the European property market in the third quarter of 2015, taking the total turnover since the start of the year to €157.5 billion, a 20% increase on the same point in 2014, according to the latest figures published by Savills.

European real estate investment  increases 20 pct to €157,5 bln

€55 billion was invested in the European property market in the third quarter of 2015, taking the total turnover since the start of the year to €157.5 billion, a 20% increase on the same point in 2014, according to the latest figures published by Savills.

The international real estate advisor reports that Portugal (+804%), Norway (+190%) and Italy (+107%) have seen the biggest increases in investment volumes, whilst Greece (-62%), Austria (-40%) and Finland (-18%) saw the biggest decreases. The UK, France and Germany remain the dominant destinations for real estate investment, although their collective share of investment volume decreased slightly from 71% in Q3 2014 to 69% in Q3 2015.

More than half (€28 billion) of investment in Q3 2015 originated from overseas, with the majority (59%) directed into just two markets; the UK and Germany. ‘American and Chinese investors have both been very active in the European market,’ comments Marcus Lemli, Head of European Investment at Savills. ‘Increases in property prices in North America and a strong Dollar have made European property comparatively cheap for American investors, while volatility in the Chinese stock market, property market and currency exchange, have led to Chinese investors seeking a balance in their portfolios through persification.

Lydia Brissy, Director European Research at Savills, comments: ‘We anticipate average rental growth in Europe of between 2.5% and 3% in 2016. Strengthening confidence in the occupier market adds additional appeal to a European market already benefiting from positive spread between bond and property yields, although growing competition and activity from US and Chinese investors will inevitably put pressure on yields. With record high prices we anticipate more assets coming to the market, fueling further demand and leading to a very strong final quarter. We therefore predict that 2015 is on track to see turnover volumes reaching €234 billion by the end of the year – the highest ever.

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