European commercial real estate investment recorded approximately $148 billion in deals during 2011, representing a 4% increase over 2010, according to the latest research from CBRE.
The fourth quarter of 2011 was particularly strong, with $41 billion in investment activity – a 15% increase over the third quarter. The uptick in commercial real estate investment during the fourth quarter was particularly strong in France (65%), Scandinavia (40%) and the Benelux region (42%).
The French real estate investment market was particularly active, recording $8.4 billion in activity in the fourth quarter, the highest quarterly turnover for France since the third quarter of 2007. Investment activity in France was primarily concentrated in the Paris office sector and included large portfolio and single-asset deals, and the level of activity was boosted by the year-end deadline for sales of corporate real estate to real estate investment trusts at a lower capital gains tax rate.
However, the French were not the leading commercial property market leaders for the fourth quarter in terms of financial activity – the U.K. saw an estimated $10.7 billion of investment transactions. And Europe as a whole was not on the upswing – Italy, Portugal and Spain suffered from lower levels of activity in 2011 compared with 2010.
‘Despite the uncertain economic climate, 2011 European property investment topped activity levels seen in 2010, buoyed by a strong year-end,’ says Jonathan Hull, head of European, Middle Eastern and African capital markets at CBRE. ‘Investors are still targeting prime assets in liquid markets, and final-quarter numbers confirm that France, Germany, the U.K. and the Nordics are key to core strategies.’