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RCA: European transaction volumes down 15% to €277bn in 2018

The final quarter of last year was marked by the contrasting fortunes of Europe’s two largest real estate markets: the UK and Germany. Real Capital Analytics’ data shows UK Q4 volumes slumped 44% year-on-year to €14.3bn due to the twin headwinds of the gathering retail malaise as well as omnipresent Brexit uncertainty.

By comparison, Germany hit a new quarterly high watermark of €24.7bn, helping Germany to leapfrog the UK as the most active market in 2018, with €68.8bn and €63.1bn, respectively.

Tom Leahy, Senior Director, EMEA Analytics at Real Capital Analytics, explained:

“Many of the statistics suggest that European commercial property has gone into decline, with growth restricted to a minority of markets and sectors. However, 2017 was an exceptional year and investment cannot keep increasing ad infinitum. While total activity [in 2018] was down from 2017 levels, investment in many markets is still hovering near record highs and investor sentiment generally remains upbeat.

“There is still plenty of equity, markets are not yet overbuilt, and attitudes to debt have become more conservative since the Global Financial Crisis. As such, property owners are looking at external factors as the most likely to disturb the current equilibrium.”

France, the Netherlands and Spain made up 2018’s top five transaction markets, with €32.5bn, €20.8bn and €18.1bn, respectively – however each market recorded heavy double-digit year-on-year declines (-36%, -27% and -23%, respectively).

Elsewhere, annual growth in investment volumes was more pronounced in smaller markets, such as Portugal, Ireland, Belgium and Poland. Austria jumped into the top 10 for the year, driven by German real estate company Vonovia’s €5.2bn takeover of Austrian listed residential company Buwog.

According to Real Capital Analytics, London retained its position as the most active European city, followed by Paris, Frankfurt, Berlin, and Madrid. Collectively, these five cities accounted for around €78.8bn of 2018’s transaction volumes, which reflects 28.4% of the entire European annual haul.

For inquiries related to Real Capital Analytics’ full report, entitled Europe Capital Trends, please contact Tom Leahy at