Steady start of the year concerning business property market in Europe
The business property market had a very strong start in the beginning of the year. The investments increased by approximately 16% during the first quarter compared with the previous three months by € 32,7 billion, data of Cushman & Wakefield reveal. The investment volume reached € 136,7 billion within the twelve months up until the end of March, which is a growth of a 4,4% annual base, the online edition of property-magazine.eu. informs.The market activity is supported by means of the enhanced debt funding as well as through the private capital. Besides, the offering of most required first-class assets, remains restricted, which supports the price increase. This does not attract a huge part of the investors who look for alternative solutions and higher income, the edition points out.
Experts focus on the fact that the inertness that the market has gathered within the first three months of the year would reflect on the entire year. The expectation is higher business property market activity and a bigger number of investors opting for more risky stocks – for instance, Central and Eastern Europe.
The company management envisages that the total volume of the business property investments in Europe will grow by about 4-5% compared with the accounted levels last year.
In spite of the restricted offering and the low income, the first-class assets keep being most demanded. The investment volume of the three major markets – Great Britain, Germany and France , increased from 57% to 64% during the first quarter previous year.
More essential market activity growth is registered not only in Denmark but also in Germany, in Russia, in the Czech Republic, in Hungary, in Luxembourg and in the Netherlands. A growth has been also registered in Israel and in Greece but they have very low base, the report shows. Higher activity is also a fact in Italy while the situation in Spain and in Portugal remains pessimistic. Surprisingly, Turkey and the whole Near East region, joins the group of the low-activity countries.
The first-class assets deficit and the high prices in Sweden have lead to lower activity in the country as the growths of the Danish market are not able to compensate it and this has influenced negatively on the entire Scandinavian region.
The industrial properties in Europe have the largest investment share – the investment volume has reached 77% on annual base, and the part of the general investment volume of business properties has increased from 8% to 11,4% the same time previous year.
Offices remain most preferred assets for the investors but the first quarter is disappointing for the segment. The investment volume in European offices has slashed by 5% on annual base and their share of the total volume has slashed from 49% down to 43% within one year. The markets in France, Sweden, Great Britain, Norway and Spain have mainly contributed to this slump.
Investors in trade properties have become more selective as the investment volume accounted a slight slump compared with the last quarter previous year but it increases by 34% during the first quarter of 2012. The share of the total investment volume has slightly jumped from 22% to 25% , the company reveals. The steadiest deals growth is a fact in France and Russia, experts add.
Crossborder investment remain exceptionally crucial for most of the European markets but at the same time biggest activity slump is registered exactly among the foreign investors during the first quarter. However, home investors have remained exceptionally active and they manage to compensate the slump.
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