Record year already for European retail investment market - Cushman & Wakefield

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Record year already for European retail investment market

EUR 51.5bn invested in European retail during the first nine months of the year, representing a 59% increase compared to a year ago

UK and Germany still represent the largest share of total investment volume with growing activity in secondary cities; Benelux, Nordics and CEE gained momentum

Shopping centres remain the most sought-after asset class, totalling EUR 26.7bn or 52% of the overall retail investment volume

Germany the most active market for the first time, outperforming the UK

European retail investment activity reached its highest level on record in Q3 2015, according to Cushman & Wakefield’s latest European retail investment market report.

Despite a slow economic recovery and rising geopolitical risks, 2015 is already a record year in terms of European retail investment volume with the final quarter’s figures still yet to be included. EUR 51.6bn was invested in the retail sector in only nine months, a 59% increase compared with the same period a year ago.

The rolling annual investment volume has steadily increased for three years now, reaching the record level of EUR 67bn in the third quarter of 2015. The European retail investment market activity has doubled in only two years.

                                                                      

Whilst core European markets remained at the top of investors’ shopping list (EUR14.2bn in the UK and EUR13.6bn in Germany in Q1-Q3 2015), fierce competition is leading a growing number to move up the risk curve and widen their scope to both secondary countries and secondary cities in core countries.

Record levels of investment flows have already been set in Benelux, the Nordics, CEE and southern Europe, as well as in peripheral countries such as Portugal, Turkey and Ireland. Investment flows have more than tripled in one year alone in most of these markets.

Shopping centres remained the most sought-after asset class during the third quarter, with EUR 26.7bn invested across Europe in the first nine months of the year. This accounts for 52% of the total retail investment volume, with a surge in portfolio transactions explaining the rise in shopping centre activity in 2015. Indeed, shopping centre portfolio deals accounted for EUR 14.4bn of the total, more than four times the yearly average volume recorded over the past decade.

Magali Marton, a director at Cushman & Wakefield commented: “Thanks to several large portfolio deals, Germany was the main hotspot for shopping centre investment activity during the first nine months of the year, with EUR 5.9bn transacted. Germany outperformed the UK for the first time in history, accounting for 22% of the overall retail investment volume compared to the UK’s 19% share.

“The other hotspot was the Nordic region with a total shopping centre investment volume of EUR 3.7bn, almost four times the volume registered during the same period in 2014. Once again, portfolio deals made all the difference, with EUR 2.7bn acquired through this type of purchase.”