DTZ, part of UGL Services, a division of UGL Limited (ASX: UGL), today released its latest European Investment Market Update. The report showed fourth quarter 2011 commercial real estate investment activity totalled €31.4bn in Q4 2011, a 17% increase on Q3 2011. This led annual volumes in 2011 to €110bn, an increase of 7% on 2010.
Magali Marton, Head of DTZ CEMEA Research, said: 'Among Europe's three largest markets, France has posted the biggest increase. Here volumes rose 83% to €6.7bn in Q4 compared with €3.6bn in Q3. The UK experienced a 14% quarter on quarter increase in activity to €8.6bn in Q4. The German market maintained its high level of activity at close to €6bn.'
Elsewhere in Europe, the Nordic markets registered a buoyant final quarter with €4.4bn invested compared to €2.7bn in Q3 mostly in Sweden and Norway. Following a strong third quarter, activity in CEE contracted from €2bn to €1.3bn in Q4 as investors have become more selective in peripheral markets.
Following last quarter's rise in activity from cross-border investors, volumes stabilised in Q4 at €10.9bn (compared to €10.2bn in Q3). Intra-regional investors were less active this quarter whilst inter-regional investors (those from outside of Europe) accelerated their acquisitions in Europe to €6bn, compared with €4.5bn in Q3, as they took advantage of relatively weaker European currencies.
Private property vehicles and companies continue to dominate the European investment market, with acquisitions totalling €17.8bn this quarter. The listed sector (who were the second most active investors in Europe) has been overtaken by institutions, investing €4.6bn in Q4.
Nigel Almond, Associate Director Forecasting and Strategy, at DTZ Research added: 'It is interesting to note that insurance companies have grown their net investment from €2.6bn in 2010 to €3.3bn in 2011, with an positive trend in net investment evident over recent quarters. This provides clear evidence that Solvency II is not having a negative impact on investment activity.'
Magali Marton commented: 'Looking forward, uncertainties in global financial markets are starting to impact investor sentiment as efforts continue to contain the European banking and sovereign debt crisis. Given this more negative sentiment we are forecasting that volumes will register a small fall in 2012, to €107 billion. On balance this would leave volumes broadly similar to the levels seen in the last two years.'
Bogdan Sergentu (photo), Head of Valuations and Consulting, DTZ Echinox commented: 'In 2011 investment activity in Romania diminished by approx 13% to a total yearly amount of 262.99mil€. Most of the transactions were recorded in the retail sector, even though it ranked second in terms of investment volume (17.4%). Mixed use transactions accounted for ca. 69% of the total volume, followed by almost an equivalent share for both residential and office sectors, with 5% and the hotel sector with 3.8%. By asset location, from a total of 13 transactions, six are located in Bucharest followed by secondary and tertiary cities such as Brasov, Ploiesti, Craiova, Sibiu, Pitesti, Slatina and Baia Mare.'
Investment activity by purchaser type identifies private and quoted property companies as being the most active. According to DTZ Echinox, investment transactions could reach €550 mil out of which €300 would be represented by distress transactions with properties that constitute bank warranties for underperforming loans.
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DTZ is now combined with UGL Services. UGL Services is a division of UGL Limited. The combined business of DTZ and UGL Services is now one of the largest property services companies in the world. It provides corporate/occupier clients with a global, integrated, end-to-end service offering and best-in-class investor services capabilities in investment agency, leasing agency, property and facilities management, project and building consultancy, valuation, and investment and asset management. The organisation has 27,000 permanent employees and 43,000 personnel including contractors, operating across 225 offices in 45 countries. For further information, visit: www.dtz.com and www.dtz-ugl.com
In November 2002, after 9 years of successful operations on the Romanian real estate market, Echinox Consulting entered a partnership agreement with the multinational company DTZ, one of the leading global real estate services companies. Therefore Echinox Consulting became the local DTZ representative office, operating under the trade name of DTZ Echinox.
DTZ Echinox provides a full range of services to investors, occupiers and owners across all sectors of the real estate market. www.dtz.com/ro
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