2015 sees record levels of retail investment in Europe
2015 was a record year for retail investment in Europe, according to new figures from CBRE. Investment reached €69bn, the highest level ever recorded and a 31% increase on 2014.
The fourth quarter of 2015 also saw a 4.6% increase in investment levels compared with Q4 2014. Foreign investment accounted for nearly half, 48%, of retail investment in Europe in 2015, a number CBRE says is "substantially higher" than in previous years. In Q4 2015, 50% of all retail investment came from cross border transactions; €8.8bn was invested, up from 42% in Q3 2015. The increase has been driven by integrated intra-regional acquisitions.
The largest retail CRE investment market in Europe is still the UK, which grew 6% in 2015 to reach €19.9bn. But the market that grew the most was Germany, with investment up €7bn to reach €16.2bn (76%). The growth was driven by the shopping centre and high street retail sectors. There was also exceptional retail growth seen in Norway, where it skyrocketed from €655m in 2014 to €4.8bn in 2015. Norway is now the third largest market in Europe, having overtaken France.
Outside of Europe, in the second half of 2015, US buyers were by far the largest source of capital, accounting for 72% of all cross-regional retail investment. Chinese buyers came in second place and CBRE found that non-European buyers seem to be looking at locations outside of core cities.
John Welham, Head of European Retail Investment, CBRE, commented: "2015 was an exceptionally strong year for retail investment in Europe. Both intra-regional and cross-regional capital was highly active, boosting many of the core markets in Europe including the UK, Germany, the Nordics and the CEE region. When compared to other commercial real estate sectors, retail property attracts a large amount of European cross-border activity and in 2016 we expect to continue seeing high levels of investment coming from on the continent."
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