BNP Paribas Real Estate: European commercial real estate investment still significant

By

Lucile Deprez

Published
Nov 20, 2015

According to a survey by BNP Paribas Real Estate, European retail property investment hit a new record, with a yearly figure of €68 billion over the 12-month rolling period ending in the third quarter 2015. As for retail trade revenues (excluding cars and motorcycles), they are expected to reach €450 billion by the end of the year.

This strong investment dynamic is shared among six major European countries: Germany, the UK and Poland lead, followed by France, Italy and Spain. Investment in these countries grew by 30.8% compared to the same period in 2014, and was the highest in volume since 2007.

Germany overtook the UK with an investment of €14 billion, compared to the latter's €11.6 billion.

Spain and Poland recorded significant growth, while investment in France amounted to €3.5 billion, equivalent to 21% of the business property total, according to Bruno Ancelin, Director of Retail Investment France for BNP Paribas Real Estate Transaction.

As for the rental market, the cost of prime locations seems to have stabilised, after a significant increase in the last few years. Reductions have actually been recorded in some German and British cities.

On the contrary, retailers in Poland are increasingly turning to city-centre locations and this, according to the analysts, could push up the value of rents.

In France, prime locations are always the most sought-after, forcing up the value of rents, while prices for second-tier locations are stable or being revised downwards.