MIPIM 2007: The CB Richard Ellis European Investment Report, launched today at MIPIM, reveals a 46% increase in the turnover of the commercial property investment market in 2006 to €227bn (£155bn).
There was a similar increase in 2005, meaning that the total size of the market has more than doubled since 2004.
The biggest increase last year was in Germany, where turnover grew by 150% from €20bn (£13.7bn) in 2005 to €51bn (£35bn) in 2006. Several other Western European countries also saw turnover more than double, including Belgium, Finland, Denmark and Luxembourg.
Central and Eastern Europe also saw a rapid increase in investment turnover, with the total for the region increasing from E5.8bn (£4bn) in 2005 to E12.7bn (£8.7bn) in 2006. Most notable was the growth in the Russian market, but there was also a substantial increase in the level of transactions in the EU candidate countries, Bulgaria and Romania, in advance of their official accession at the beginning of 2007.
The other key trend was the growth in the level of cross border investment. This increased by 70% to more than E100bn (£68bn). Almost half of all transactions now involve a foreign buyer. The increase in investment by non-Europeans was particularly evident, with buyers from the US especially active. However, the growing presence of Canadian and Australian investors also showed through.
‘The recent trends in the European real estate markets are a result of two major trends in global capital markets,’ said Nick Axford, head of EMEA research at CBRE. ‘The ageing population of many developed nations has increased the level of savings looking for a home, while at the same time investors are recognising that real estate has characteristics that are well suited to the needs of such savings.’