Trading activity in continental Europe increased in Q1 2017 despite the uncertainty generated by General Elections in several notable markets, according to the latest report from leading real estate advisor, CBRE. Total real estate investment in continental Europe reached €38.9bn in Q1 2017, up 12% on Q1 last year. The total investment volume for the whole of Europe – including the United Kingdom – was €53.9bn, compared with €54.7 in the same period last year.
The momentum witnessed in Germany in Q4 2016 continued into Q1 2017 with investment volumes reaching €12.6bn, a 49% increase year on year. Germany, along with the Czech Republic, Hungary, Spain and Sweden, all had a record first quarter, whilst France, which experienced a calmer Q1 reflecting a similar trend to previous years, will likely benefit from strong demand for exposure to gateway markets in the remainder of the year once investors have more clarity on the election results. UK volumes were down 25% on Q1 2016 (18% in GBP) but were still the largest across Europe at €15bn. Furthermore, allowing for the usual Q4 seasonal peak, Q1 2017 represents the second consecutive quarter where a recovery in the UK market was evident following a decrease in volumes in the lead up and directly following the EU referendum. An upturn in Central London real estate investment in the first quarter is also an encouraging sign of continued improving sentiment.
“Continental European markets continued to perform strongly in the first quarter of 2017 with investors paying premium pricing for the highest quality product. Germany has been a primary focus for core property assets and is likely to continue to be seen as safe haven for global capital. Sentiment in Central London remains very positive with overseas buyers, notably from Asia dominating the market, particularly for larger assets. The upturn we have seen in Central London should, in turn, have a positive impact on demand for the UK regions.” said Jonny Hull, Managing Director of EMEA Investment Properties at CBRE.