European Commercial Real Estate Continues its Ascent in 2015
Overseas investment has continued to pour into Europe's commercial real estate markets which have recorded growth for the seventh consecutive quarter in the first three months of 2015.
CBRE's All Property Capital Value Index increased by 1.1% during Q1 2015, across all asset classes in European commercial real estate.
The index shows Germany, the UK and the Nordics as the strongest performers, with values rising across the board by 1.7% in Germany and 1.6% in both the UK and Nordics during the first quarter. The industrial property sector boosted southern Europe, driving growth up 0.6% over the same period.
Industrial property continued its reign as best performing asset class in the commercial sector, recording growth of 1.7% followed by retail at 1% and offices 0.8%.
CBRE's senior analyst Matthew Edmonds said: "Once again, there was compression across the full range of yields as investors continue to seek opportunities further up the risk curve. Prime assets are still the highest in demand but the group of assets with higher equivalent yields compressed noticeably, confirming growing interest in more opportunistic and value-add properties region-wide."
Investment hotspots have shifted focus in the last year with many investors taking advantage of the relative strength of the dollar and sterling against a weak and consistently fragile euro. More foreign investors are looking again at Greek property markets on the back of the country meeting its debt obligations and showing signs of getting back on track, particularly in its property markets.
Going forward into 2015, it seems likely that momentum will continue to gather across Europe's property markets, led principally by non-EU investors seeking to capitalise on euro weakness, particularly in countries offering residency visas for property buyers.