Savills: real estate investment volumes +18% in Europe in Q2

European real estate investment volumes in Q2 2024 are set to increase by 18% on Q1 figures, according to new research by Savills. Volumes are estimated to reach approximately €44.5 billion in Q2, while cross-border investment activity is expected to increase in the second half of the year.

Investment volumes for H1 2024 are projected to exceed €74 billion, roughly in line with H1 2023. Savills predicts anticipates that the UK, Spain, Italy, Romania, the Czech Republic, Poland, Denmark and Norway will all record a year-on-year increase in investment volumes for H1 2024.

In terms of pricing, this is the first time in nine months that average European yields have remained stable across all sectors, the research shows.

 “The market seems to be bottoming out both in terms of activity levels and pricing,” said Marcus Lemli, CEO Savills Germany and head of investment Europe. “Sectors such as multifamily, hospitality, and logistics continue to see stronger investor interest. Many investors operating internationally are seeking to take advantage of appealing pricing levels across different European jurisdictions. Consequently, we expect to see an increase in cross-border investment activity over the next 6-12 months.”

Savills research shows that institutional investors are cautiously re-entering the market as interest rates decrease.

“As expected, REITs are gradually increasing their activity”, said Lydia Brissy, director European research, Savills. “Attractive valuations and the growth of specific asset classes considered more defensive are benefiting REIT fund managers. Meanwhile, many cash-rich investors, privates and sovereign wealth funds that do not rely on costly debt, continue to engage in smaller and medium-sized transactions.”