European investment volumes up 10% over last four quarters, despite seasonal decline in Q1 2010, says DTZ

Reflecting seasonal trends, the volume of commercial real estate investment across Europe posted a 29% quarter-on-quarter decrease to €16.3 billion, when compared to fourth quarter 2009. However, first quarter 2010 volumes were still 65% higher than the €9.9 billion recorded in the same period a year ago, according to global real estate advisor DTZ in its first estimate of European investment volumes, published today.

Commenting on the figures, Magali Marton, Head of CEME (Continental Europe and Middle East) Research, said: “The fall in activity over the quarter was not surprising given the flurry of activity in Q4 2009 as investors rushed to deploy capital before the end of the year. This seasonal pattern has been a traditional feature in the European property investment markets. In fact, the average volume over the last four quarters rose by 10% from €15.3 billion to €16.9 billion and underscores the gradual recovery in Europe’s markets.”

Around two-thirds of activity was accounted for by the big three markets of the UK, Germany and France, with Germany grabbing a bigger share as activity rose 40% over the quarter from €3.1 billion to €4.3 billion. In contrast volumes in the UK (€4bn, down 56% quarter-on-quarter) and France (€2.4bn, down 42% quarter-on-quarter) were weaker, reflecting both increased investor caution and a general lack of stock in the market. Elsewhere in Europe, the market has been very dynamic in the Nordics countries with an increase by 64% quarter-on-quarter to €2.6bn.”

Magali Marton said: “Despite much more optimism demonstrated by investors, risk aversion remains evident across Europe; with investors concentrating on domestic markets and particularly on prime assets in core markets.”

As occupier markets remain weak and uncertainties remain over the sustainability of the economic recovery, a number of investors are biding their time in making decisions. With a growing level of debt due for refinance in the next couple of years we see opportunities for those investors with equity acquire opportunities which to date have not been available in the market.