Investment in European Retail Property Increases by 34%

28 July 2011

Investment into retail property in Europe during the second quarter of this year increased by 34% compared to last year, totalling €4.9 billion, according to figures from Jones Lang LaSalle. Some 56% of the investment activity centred on Germany and the UK, and Sweden is continuing to attract significant levels of interest, as investment this year in the country has already exceeded investment levels for the whole of 2010.

 

Russia and Poland also performed well at €432 million and €332 million respectively, and this is mainly due to major transactions in Moscow which were the €278 million purchase of GOrbushkin Dvor Filion Shopping Centre, while in Poland Promenada Shopping Centre in Warsaw was bought by Atrium.

 

Jeremy Eddy, head of EMEA Retail Capital Markets at Jones Lang LaSalle is forecasting that although investors will remain focused on core European markets such as France and Germany, Poland will continue to garner significant investor interest, and Turkey and Russia are seen as real growth markets for investors seeking higher returns provided by rental and turnover growth.

 

Most investors are looking for shopping centres, as these accounted for 59% of transactions over the second quarter, and supermarkets are also proving popular, with a number of significant transactions taking place during the second quarter, including the purchase of four stores in Sweden.

 

Poland is proving one of the most popular countries for retail property, closely followed by the Czech Republic, and even though the European economic recovery has been somewhat patchy, investment levels are continuing to increase year on year. The research by Jones Lang LaSalle included all investment transactions for retail warehouses, factory outlets and shopping centres in Europe but excluded any deal worth less than US$5 million.

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