Continuing demand in the European commercial property market in the first quarter of 2010, increased confidence and spread interest to new areas, according to PropertyWire.com a recent report by Cushman & Wakefield. Foreign buyers were particularly active.
Overall, analysts say the market experienced an all-around improvement in the early months of 2010. Even so, issues such as an increasingly polarized market bar a full recovery. For example, while the United Kingdom, Turkey and Sweden saw modest rental growth, Bulgaria, Ireland, Slovakia, Romania and Greece had a notable decline.
Retail accounted for 43% of all trading in the first quarter, up from 30% last year and at its highest in at least 10 years. Germany overtook the United Kingdom to become the largest retail market over the quarter. A factor behind the increased activity in the retail sector was the modest increase in availability of affordable debt. This has led to the increased trade of larger lots and shopping center portfolios.
Retail is likely to be strongly favored as a low risk, low volatility asset with good income growth through careful management. Many investors also expect a more rapid return of rental growth.
“We continue to expect a strong outturn for trading volumes this year, with activity increasing around 50% to €110 billion,” David Hutchings, Head of European Research at Cushman & Wakefield. “Europe’s three largest markets, the UK, Germany and France, will see the bulk of this but other larger western markets will be buoyant, such as Italy and the Netherlands.”