The main analysed cities: London, Paris, Milan and Frankfurt, featured relevant operations during the third quarter, especially concerning prime office assets, which remains the most attractive segment for core investors. «The vaccination deployment across Europe unlocked international travel and allowed investors to physically visit the assets», pointed out Luke Dawson, general manager for Europe, Middle East and Africa (Emea) at Capital Markets.
Logistic assets remain a key segment across Europe thanks to e-commerce’s continuous growth and the limitations shown by the supply chain during the pandemic. Despite investors remaining cautious concerning retail and hotel assets (currently the two most affected segments), activity is starting to come back strong for these segments, especially for the hotel segment in countries like Spain.
Both retail and institutional investors continue showing a strong interest in housing assets and, in particular, in build-to-rent investments, within urban areas across Europe. Colliers estimates that, when compared to the last quarter, real estate markets will continue having the same levels of activity during the Winter months, with investors alert to any new Covid outbreaks.
Hotels, the star assets in Spain
With the end of the travel restrictions in Europe, the recovery of foreign tourism and cheaper assets, investors redirected their focus to the hotel segment. In Spain, the third quarter witnessed a frantic competition to earn a market share, with investment surpassing 1.2 billion euro. Alternative assets, in particular data centres and new housing models, are also lifting real estate investment in Spain.
United Kingdom, slight drop during the third quarter
During this year’s third quarter, around 11 billion pounds were invested (13 billion euro) in real estate in the United Kingdom, which represented a 10% yoy increase, despite still being 25% below the quarterly average of the last five years and also below the 16 billion pounds invested during the second quarter.
Great investment from Allianz in Frankfurt
Allianz’s acquisition of Tower I within the Four development in Frankfurt, for around 1.4 billion euro, represented the largest transaction of a single asset in Germany this year. The office segment is unrivalled in the German market, where it represents 50% of all transactions. Retail ranked far behind, with a market share of only 16%.
Investment in regional assets in France
France’s regional cities are witnessing a capital increase in logistic and commercial assets, with a strong presence of foreign investors. Despite the lower yoy investment during the third quarter, the number of operations had a smaller yoy drop, since the market redirected its focus towards smaller transactions between 50 and 100 million euro.
Logistics dominates Italy
Logistic operations represented nearly 50% of the Italian quarterly investment volume, a market record, which reflects the new post-pandemic commercial reality. Foreign investors dominated the Italian market, representing 74% of all investment so far this year.