2018, record year for investment in the European real estate sector

2018, record year for investment in the European real estate sector


This number represents a growth of 0.3% over 2017, which had also established a record with 311.000 million.

France, Netherlands, Poland, Spain and Portugal registered record levels of investment in 2018, with the two latter countries growing above 50% (56.9% and 51.4% over 2017 respectively). Spain, with more than 20.000 million euro invested, had a particularly positive performance in the second half of 2018, boosted by large operations such as the purchase of Hispania and Testa by Blackstone, among others.

On the other hand, in Germany 2018 was the second best year for real estate investment with 77.000 million euro, 5.9% more than in 2017. While total investment in the United Kingdom dropped 6.5% in 2018, due to the greater caution from investors faced with an uncertain geopolitical scenario, activity in Central London grew 10% when compared to 2017.

The hotel sector proved to be very attractive for investors in 2018. Hotels and other alternative assets broke investment records with 22.000 million euro and 21.000 million euro respectively, with the alternative sector growth being boosted mainly by the healthcare sector. Additionally, the housing sector (investment in residential buildings destined for rental) also reached historically high investment volumes with 50.000 million euro, 22.4% more than in 2017, which consolidates its position as the second largest asset typology, overcoming Retail for the first time.

Nevertheless, the office sector remains the one which receives the most investment, with a total volume in Europe of 127.000 million euro 6% above last year’s numbers. The industrial and logistic sectors maintained a good activity.

Lola Martínez-Brioso, director of Research at CBRE España, commented that «2018 has proven to be a record year for investment in the real estate sector, with Europe keeping particularly strong. In general, there is an important lack of prime product in the main European capitals and this also occurs in Spain, especially in Madrid and Barcelona, which has caused investors – in search of better opportunities and revenues – to focus on other destinations such as Valencia, Seville, Bilbao, Balearic Islands, the Cannary Islands or Malaga».

In order to start the process, the basic supply companies should consider creating unities dedicated to design and test new solutions, while at the same time adopting open innovation models. The mid sized basic supply companies could combine resources if they lack the scale to compete with technological giants or much larger competitors. One thing is sure, disruption is coming and the basic supply companies must act in order to encompass a market segment which is expected to grow in the long term.

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