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Commercial Property Investment Spikes in Europe

Mar 19 2018

Darren Best

Research in the European Quarterly, Commercial Property Outlook (Q3 2017) – released by Knight Frank – proves a strong third quarter in 2017 has positioned European investment volumes on course to beat 2016. In fact, a total of €47.4 billion was invested in European commercial property in the third quarter (Q3) 2017; a 13% increase on the same quarter of 2016.

Savoystewart.co.uk, inspired by a performance which took European commercial investment volumes for the first three quarters of 2017 to €144.4 billion (up by 3% year-on-year), took time to consider the countries stirring the most interest in investment in Europe. It was revealed several countries experienced a spike in commercial investment in 2017, most significantly in Finland, with a total investment of €5.6 billion, Q1-Q3 – a rise of 121.60% on figures from 2016. Following on from this success came Hungary (89.90%), Romania (73.50%), the Czech Republic (43.30%) and Netherlands (41.70%), with substantial increases measured. The UK missed out on the top ten for higher commercial investment volumes, yet still received an outstanding €37.6 billion in commercial investment, Q1-Q3 2017, which accounts to a 2.80% rise on 2016. Certainly, the recovery in UK volumes has been driven by the sale of large assets in London to overseas buyers, notably in Hong Kong, including a single €1.4 billion deal – the largest in the third quarter of 2017. The UK’s position as a strong contender in commercial property therefore, should not be overlooked. This is especially the case seeing as other European locations experienced catastrophic falls in commercial investment volumes, the top 3 recognised as Ireland (-58.30%), Sweden (-38.60%) and Switzerland – with an average -35.50% fall in investment figures. Further, it was found the top five preferred sectors for investors* in 2018 are Logistics and Industrial (51.0%), Specialist – including automotive/student/healthcare – (28.3%), Office at 15.2%, Hotel (3.4%) and Retail with 2.1%. Darren Best, managing director of savoystewart.co.uk, comments:
“This rise and fall could reflect how investors are beginning to look toward locations outside of populist countries; places which may offer a renewed energy and stability to commercial business in uncertain times.   I believe the top ten countries will certainly be commercial locations to watch in 2018. But what is also crucial to note, is that investment in commercial property in Europe is thriving, overall – and the UK plays a large part in that.”
*Knight Frank recently took a snapshot of investor sentiment, polling European-focused clients at its annual European Breakfast event. Feature image credit: Phongphan/Shutterstock

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