MAPIC 2013: European retail investment in the past six months has reached €16.2bn (£13.5bn) – up 14% on 2012.
According to Colliers International, the UK maintained its leading position, attracting 33% of the capital in Q2 and Q3. However, the largest growth in investment volumes was seen in Central and Eastern Europe, with growth of almost 50% year-on-year.
Retail real estate investment in Europe in Q2 through to Q3 2012 stood at €14.3bn.
In Central and Eastern Europe, Russia and Poland attracted the vast majority of the capital, with 6% and 5% of European market share respectively. High-volume investment transactions included the largest ever transaction in Russia – the purchase of Metropolis Mall in Moscow (50% stake) by CalPERS and Hines. Other notable deals included Aura in Novosybirsk, Russia, for €382m by RosEuroDevelopment, and in Poland the purchases of Silesia City Center in Katowice for €412m. In Q4, Inter Ikea Center Group bought Wola Park, a 610,000 sq ft shopping centre in Warsaw, Poland.
Neil Gregory-Eaves, Colliers’ head of investment services in Eastern Europe, said: “Global capital flows into the Polish retail investment market has continued to accelerate this year. As prime schemes in Warsaw remain under long term ownership, investment volumes in Poland are driven by purchases in secondary cities and the wider regions are now witnessing an improvement in risk tolerance. Retail investment yields in Warsaw are expected to continue to contract.”
“Poland is appealing to international investors because it is a reasonably transparent and liquid market with a good growth story thanks to relatively under-developed high streets compared to western shopping precincts. To a lesser degree the Nordic region also looks attractive to investors, based on economic stability and its relative insulation from the Eurozone. US buyers continued to dominate the market, followed by investors from China, Germany and the UK.”
Shopping centres were the dominant sector in Q3 with all major cities in the UK along with Munich, Oslo, Riga and Krakow experiencing shopping centre yield compression.
Colliers forecasts that this trend is unlikely to continue at the same level if all the shopping centre projects currently under construction are completed as scheduled over the next six months. This would deliver more than 40m sq ft of new shopping centre space to the market, primarily in Russia, United Arab Emirates, Turkey and Poland.