Investment volume in commercial property: Poland top, Romania flop
Marcus Lemli, Managing Director of the German market and Head of Investment Europe at Savills , expects total annual sales of € 242 billion in the European commercial real estate segment this year as well. This goal is to be realized despite currently slightly dampened investment activities. Above all, the fact that top properties have an above-average yield compared to bonds will cause demand to rise again. Accordingly, a special interest would be in office real estate , but also alternative real estate has become the focus of investors. The German real estate market alone makes it clear that interest remains high. Here alone, 40 percent of the investments were in office real estate. Overall, the number of investments should decline somewhat, but some mega-deals are expected . In the previous year alone, these realized 30 billion euros.
Result of the first quarter of 2018
The fourth quarter of last year is considered one of the strongest ever documented quarters in the commercial real estate sector. In the first quarter of 2018 , Savills recorded sales of around € 46 billion in the commercial real estate segment. In direct comparison to the record quarter, this results in a minus of eight percent. Considering the average, the minus is still at three percent . However, the high level of volatility that emerges in the first quarters may be attributed to an increase in sales to the previous year's level. The service provider is already expecting a transaction volume of around 55 billion euros in Germany. This value would build on the strong conclusion of the previous year.
The dominance of the economically strong countries
The strongest sales growth was achieved by Poland with an increase of 329 percent . Belgium then followed an increase of 248 per cent and Luxembourg an increase of 144 per cent . In Poland, a one-time effect resulting from the sale of a retail portfolio led to this rapid increase. In Belgium, many major deals, which were completed in the last quarter of last year, were carried over to the new quarter . The dominant markets in Europe, however, remain the business locations of Germany, France and the United Kingdom . A total of 63 percent of the activities of the European domestic market are attributable to these three markets.
Romania was one of the big losers of the first quarter, with a drop of 81 percent in transaction volume. In the Czech Republic , the total market for commercial real estate fell by 77 percent and in the Netherlands by 53 percent . According to Savills, this decline can be attributed to the strong year 2017 . Above all, the fact that sales in the Czech Republic and Holland remained above the long-term average is an indication of normalization . A constant remains the capital of non-European investors , because this amount hardly changed in comparison to the previous year. Meanwhile, around 30 percent of cross-border transactions can be traced back to foreign investors . However, no rule can be identified among the target sectors and the target regions . The yields of office buildings also suffered a negative development, as they are only 3.86 percent due to the high demand and the high price.