Commercial
real estate investment volumes in the UK dropped by 19% in 2019, reflecting
investor caution amid political uncertainty.
Investment volumes in the UK totalled €60bn (£51m), down from
€74bn in 2018, according to CBRE.
Across
the whole of Europe (including the UK and Ireland), investment volumes totalled
€315bn in 2019, down 2% from €322bn in the previous year.
However,
continental Europe performed well, with commercial property volumes hitting a
record high of €248bn in 2019.
This
represented a 2% increase from €243bn in 2018, which was previously a record
for investment volumes.
Chris
Brett, managing director of EMEA capital markets at CBRE, said: “2019 proved to
be a record year for real estate investment in continental Europe, with many
countries experiencing record levels of investment. The UK proved more
challenging, with many overseas investors taking a more cautious approach amid
heightened political uncertainty.
“There
continues to be a scarcity of prime product across the major capital cities in
continental Europe, which has driven yields to record lows. However, capital
flows towards real estate are strong and M&A activity remains prevalent in
the sector. The European Central Bank’s decision to lower interest rates and restart
quantitative easing gave an added impetus to investment volumes in the fourth
quarter, and we expect the market environment to remain favourable towards
European real estate investment in 2020.”
Germany,
France, the Netherlands, Sweden, Ireland, Austria and Portugal all achieved
record levels of investment in 2019. Gains were particularly significant in
Austria, Sweden and Ireland, which rose by 39%, 56% and 58%, respectively.
Investment
volumes in Ireland also reached a new high of €7.2bn, exceeding all forecast
expectations. This was driven by the €1.3bn sale of the listed Green REIT to
Henderson Park and Starwood’s €550m sale of the Cedar portfolio.
Germany
was the largest investment market in Europe for the second year in a row. Total
investment volumes reached €84bn, up by 8% on the previous year.