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Platform deals boost Q3 totals as Europe heads for recovery

Part of the Akelius portfolio acquired for €9.1bn by Heimstaden Bostad in September.

Large platform deals, including Heimstaden’s €9.1 billion acquisition of a residential portfolio from Akelius, helped European investment volumes to a 55% increase during the third quarter. There is “a notable recovery” underway according to CBRE.

The firm said the quarter’s €77.3 billion total signals a return to pre-covid levels and was higher than the Q3 figures for the five preceding years except 2019 when investment volume hit €78.8 billion. The Q3 investment volume has brought the year-to-date investment total to €208bn, up from €189bn in 2020.

All major markets, except for France, saw an uptick in Q3 volumes compared to the previous year said CBRE including the Netherlands (123%), Germany (96%), the Nordics (94%), Spain (85%) and the UK (64%).

The UK, the Nordics, Spain and Germany have lead the year-to-date recovery with investment volumes up 47%, 30%, 22% and 8% respectively compared to the same period in 2020.

However, the total volume for the first three quarters declined in France (-13%), Italy (-8%) and the Netherlands (-3%).

The property sectors also performed differently. Hotel volumes were up 24% year-to-date and up 41% on Q3 2020.

Chris Brett.

Industrial and logistics investment volumes for the first nine months increased by 65% on 2020. Multifamily investment volumes were up 20% on the same period last year and 143% up on Q3 2020.

In the 12 months from Q4 2019 to Q3 2020, multifamily represented 22% of the total European market, growing to 27% in the 12-month period from Q4 2020 to Q3 2021.

The industrial and logistics sector increased its share from 12% to 19% over the same period. Although the office sector’s share of the total was reduced from 38% to 31%, it remains the largest investment asset class in Europe. 

And while retail investment in Q3 2021 was 20% more than in the same quarter of 2020, it was 21% down on the first nine months of last year. 

 “The positive sentiment from capital at EXPO Real in Munich this week points to a very active Q4 across all markets and so we expect the recovery we have seen in Q3 to continue and for 2021 volumes to exceed the total we saw in 2020,” said Chris Brett, managing director, EMEA Capital Markets, CBRE. “In light of the pandemic, we are seeing a flight to quality in the office market, with the higher quality space which has strong ESG credentials commanding higher rents.”