Europe’s full-year investment total could be 14% shy of 2019

If there are no further setbacks, investment in commercial property in Europe is expected to reach €100 billion in Q4 following what Colliers International has described as “a robust turnaround in larger, post-COVID deals in Q3”.

If this volume is achieved in Q4 it would take the whole-year figure to about €270 billion, down only 14% on 2019, the firm said.

The report, Prevail & Prosper, examines capital flows and CRE hotspots across EMEA and at how the investment market, cities and sectors have reacted to the pandemic

The report also concludes that German and Nordic markets benefit from the most stable macro and political environments, and their mid-sized cities with alternative commuting solutions, low lease break risks and tight supply-demand conditions put them at the top of the core league table.

London and Paris set to ride out uncertainty

Colliers also said that London and Paris will not face diminished long-term economic positions despite several market uncertainties.

“Property sectors such as logistics, affordable residential, science parks and healthcare continue to attract more demand with investors taking caution and becoming highly selective in the other sectors,” said Colliers International head of cross border capital markets Richard Divall. “Of course, the market is still fragile, and external factors could send the market back into turbulence.”

Possible obstacles include the US Election in November, and a potential second wave of the pandemic in Europe, Divall said. “However, if this can be avoided and smooth waters prevail, we could see investment volumes reach over €100 billion in Q4, doubling those of Q3 and Q2.”

Richard Divall, Colliers International.