Investment volumes in the European commercial property market rose to almost 44 billion euros in the last quarter of 2012, according to property consultants Cushman and Wakefield. This figure represents the highest quarterly showing since 2007.
Moscow had the most active office market in Europe during 2012
The firm is now predicting that volumes could grow by five or six percent to 141 billion euros year, even though the European economy is still struggling to emerge from recession.
Cross border investment was the biggest area of growth last year, according to David Hutchings, the firm’s head of European research.
He stated recently that it outpaced domestic buyers and added that core markets still offered the “security of quality assets and solid returns” for investors.
According to data from Cushman and Wakefield, commercial property investors are focusing their attention on larger core markets. The market share in Nordic countries is also gaining in popularity, rising from 15.3 per cent in 2011 to 17.9 per cent in 2012.
Investors have come into the market from North America, other parts of Europe, and the Middle East. Money has also flowed in from China and other Asian countries.
Prime markets have produced yields of seven or eight per cent. Secondary markets have produced yields of 12-14 per cent during this period.
Investors looking for higher yields in 2012 were not afraid of taking on a higher level of risk on location such as Turkey and Russia.
Moscow had the most active office market in Europe. Tenant and development demand were both very strong, and there is the potential for great returns on investment.
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