10/15/2020 | Press release | Distributed by Public on 10/15/2020 01:08
The international real estate advisor notes that the absence of some competitive investors from outside of Europe has allowed European investors to fill the space.
Between January and September 2020, German investors have invested more than €1.4bn into Spanish commercial property, an increase of 77% on last year's total volume (€800m). During the same period of time, over €1.89bn was invested into the UK (compared to €1.9bn for the whole of 2019) and over €850m into Italian real estate (79% of last year's total of €1bn), so could well surpass both in the final quarter of the year.
Similarly, French investors have already allocated €2.45bn to German and €326m to Irish real estate, compared to €2.54bn and €338m in 2019, respectively. This investor group is also on track to acquire more in the United Kingdom and Italy by the end of the year, having invested €1.1bn into the former and €1.5bn into the latter already (compared to €1.2bn for the UK and €1.69bn for Italy in 2019).
Eri Mitsostergiou, Director European Research at Savills, says: 'Two things stand out for me from this data. Firstly, European real estate continues to be seen as a safe investment in times of Covid-19, in particular core offices, prime logistics and multifamily assets due to stable and long-term returns. Secondly, while they continue to invest into their home markets, both German and French investors have been diversifying their portfolio which is why their allocation to many other European countries is on the rise.'
Marcus Lemli, CEO Savills Germany and Head of Investment Europe, says: 'In challenging times, it's normal to go to markets you're familiar with, which is why we're seeing so much German and French capital looking at domestic and neighbouring markets again. Furthermore, the notable rise in European investor activity led by these two groups is a result of the money pouring into pension funds that needs to be reallocated in order to generate returns, with real estate benefitting.'
Between January and September 2020, €56.9bn was invested in German real estate. Commercial real estate accounted for around €41.1bn, which was 9% below the previous year's figure. Residential properties transacted for €15.8bn, up 29% year-on-year, according to Savills.