About €152 billion was invested in European real estate in the first half of this year according to CBRE which it says makes that the strongest ever first-half figure. Although the data is preliminary CBRE said that commercial real estate investment volumes were 10% ahead of the same period in 2021.
The previous H1 record was €151 billion which was invested in H1 2018.
For the 12 months ended 2022 Q2, investment volume totalled €377 billion. Volumes in most European countries increased during the period.
CBRE said that the majority of this year’s first half figure was invested in Q1, when the volume was €84 billion, also the second strongest ever first quarter after the previous record was set in 2020.
However, increased borrowing costs and economic uncertainty slowed investment activity in Q2 2022 when volumes declined 11% to €68bn.
Inflation and central bank rate increases have affected property prices around the world according to CBRE which pointed out that the European Central Bank (ECB) is expected to increase interest rates for the first time since 2011 next week.
The poorer performance of the second quarter was not universal and Ireland (+47%) and Belgium (+134%) both posted record Q2 volumes. Italy was 53% up, Spain +44% and France +24%.
Looking at the different real estate sectors, European office activity increased by 19% over the first six months of 2022. Industrial and logistics was up by 15% over the same period and residential volumes were down by 10%. European retail volumes were up by 54%, driven largely by a major portfolio sale in Spain.
“Despite higher borrowing costs, investors retain a strong appetite for commercial real estate, particularly as a partial hedge against inflation,” said CBRE managing director EMEA capital markets Chris Brett.