Real estate investment in Europe breaks records and reaches 359,000 million

Real estate investment in Europe breaks records and reaches 359,000 million

This follows from the latest report presented by CBRE, which points to a fourth quarter also with historical figures, with an investment volume of 136,000 million euros, which represents a year-on-year increase of 37% and 10% more than between October and December 2019.

Generally speaking, most major European markets have seen increases in 2021 compared to the previous year. In the United Kingdom the rise has been 49%; in Ireland, 54%; in the Nordic countries, 44%; in Germany, 39%; in Spain, 33%; and in Italy, 13%. But it has been the German country, with a total volume of investment of 110,000 million euros, which has scored the highest record recorded by a European country.

However, other markets, such as the French, the Portuguese and the Netherlands, have seen investment reduced by 9%, 21% and 10%, respectively.

Investment by segments

The office market continues to be the main focus of investment in Europe, with volumes reaching 111,000 million euros in 2021, 16% more than in 2020. Growth has been especially strong in the Nordic countries (117%), United Kingdom (48%), the Netherlands (30%), Spain (27%) and Germany (10%).

According to CBRE, this figure indicates "the return of investor confidence" and by 2022 the consultancy expects a broader geographical recovery of investment in this sector.

Driven by numerous mergers, acquisitions and portfolio activities, multifamily has also continued to perform exceptionally well. This sector has added an investment of 102,600 million euros in 2021, only 9,000 million behind offices, and 42% higher than 2020.

Among the major operations carried out in this sector, the acquisition of the residential platform of Deutsche Wohnen in Germany stands out, with a value of 22,300 million euros, by Vonovia; and the sale to Heimstaden of Akelius's residential business in Germany and the Nordic countries, worth 9.1 billion. The consultancy expects this trend to continue in 2022.

It has been a record year for investment in the industrial and logistics sector, with an increase of 48% and a volume of 62,000 million euros. According to CBRE, "a very strong job market" has underpinned notable deals, such as the €3.1 billion recapitalization of EQT Exeter's Europe Value Venture Fund III by GIC; the acquisition, for more than 2,000 million, of the Asda distribution network by Blackstone; or the sale of 1,000 million euros of the Spanish logistics portfolio of Montepino and CBRE Investment Management to Bankinter.

As for the volumes of investment in hotels, they have continued to recover. Specifically, they have reached 17,100 million euros in 2021, 70% more than the previous year. Meanwhile, retail remains under pressure, with volumes falling 11% to €35.2 billion in 2021. Although there are markets that have seen an increase in figures, such as the United Kingdom (51%), the Nordic countries ( 23%) and those from Central and Eastern Europe (41%).

"We have seen a strong rebound in investment volumes in 2021, surpassing the previous record set in 2019, and we expect the positive momentum to continue. The recovery has been supported by the low interest rate environment and strong economic growth. This has bolstered investor sentiment, but rising inflation and the continued emergence of variants of COVID-19 remain challenges Following record results from the multifamily and industrials & logistics sectors, we expect increased investor appetite for this asset class in 2022, and the office recovery is well under way Investors are starting to see the value of the retail sector again and we expect more capital to flow into this sector in 2022, especially retail parks and to grocery stores," said Chris Brett, CBRE's Managing Director of EMEA Capital Markets.

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