European investment to top €210 billion
Madrid, Spain, where the commercial property market has enjoyed a rebound Photo: JTRK_II
A new report from the advisor predicts that total investment volumes could climb by between 5 and 10 per cent year-on-year by the end of 2015. This would take volumes to over €210 billion, compared to the €199.3 billion transacted in the whole of 2014.
The firm predicts a steady open to the year, with around €38 billion invested in the first three months of 2015 - the same as 2014 - but that future months will see volumes increase. The forecast arrives despite concerns surrounding the European economy in the wake of the recent Greek election and the ECB's introduction of quantitative easing. Weak conditions, though, are only expected to boost the appeal of European property, which will become more affordable as result.
Marcus Lemli, head of European Investment at Savills, comments: "We predict that 2015 will be another strong year for European investment and will continue on the upward trajectory we saw in 2014 with total volumes increasing by 36 per cent yoy from 2013. The quantitative easing program announced by the ECB, the expected devaluation of the Euro against other currencies and low interest rates will all help to continue to make Europe an attractive place for real estate investment.”
Savills reports that the core European markets continued to absorb the majority of cross border investment with France, Germany and the UK all recording total investment volume increases of 38 per cent, 28 per cent and 16 per cent respectively. However, it was the peripheral markets of Spain and Ireland which saw the most drastic increases of 194 per cent and 132 per cent respectively. In these countries, volumes were underpinned by the disposal of properties by the public asset development funds of NAMA in Ireland and SAREB in Spain.
The Nordics also saw strong increases in investment activity at 80 per cent, 62 per cent and 58 per cent for Sweden, Norway and Finland respectively. In these markets, activity was predominantly driven by domestic investment. Poland was the only country in the survey area not to see increased investment, with a marginal drop of 9 per cent.
The firm predicts that industrial investment in Europe could grow in 2015 by up to 13 per cent as the sector continues to adapt to online retail trends. Investment in the office sector accounted for the highest total at 51 per cent and retail 25 per cent, which was down on previous years. While the firm attributes the slow decline in retail investment to continued weak consumer confidence, it expects it will rise in popularity in 2015 and 2016 as economic recovery continues in Europe.