European real estate investment markets rebound in Q2 2021, says CBRE
Driven by strong activity in the UK and Germany, total real estate investment in Europe reached €70bn in Q2 2021, representing an increase of 45% on the same period last year, according to the latest data from global real estate advisor, CBRE.
The standout market overall was the UK, where Q2 2021 investment activity saw a 279% increase on the same period last year, with investment totalling €16.8bn. Germany also bounced back strongly in Q2, with €17.8bn of total investment activity, up 27% on Q2 2020. Other markets showing positive recovery in Q2 include Denmark, Norway, Spain and Sweden.
Strong Q2 performance brings H1 2021 investment volumes in Europe to €125.6bn, a 9% decrease from €138.7bn for the same period in 2020. Nevertheless, an overall positive trend is emerging, when factoring in that Q1 2020 was pre-Covid and the highest Q1 on record for the European Real Estate market.
Looking at the sector figures, the rise in e-commerce, which has been a catalyst for low vacancy rates and strong demand, has caused the industrial sector to continue to perform well across Europe. Industrial volume rose 64% in H1 2021 in comparison to the same period last year, with investment reaching €25.4bn.
As governments re-opened their economies and a return to offices increased, investment into the office sector rose 37% in Q2 2021, reaching €22bn in Europe, including the UK. Significant bounce backs during the quarter were seen in some of the major markets, including UK (up 300%), Spain (up 249%) and Germany (up 67%).
With the partial lifting of travel restrictions in Europe, hotel investment volumes have also shown signs of recovery, rising 9% in H1 2021 to €6.4bn on the same period last year. This activity was principally driven by Italy, France, UK, Germany and Spain.
In the residential investment sector, half-year investment volumes reached €28.3bn, down 26% on the same period last year. Investors are still showing interest in the multifamily housing sector across Europe, with increasing global capital targeting the sector and investors seeking platform acquisitions to build scale.
There has been a marked recovery in investment volumes across Europe. Countries that are more reliant on the office sector have generally demonstrated less of a bounce back than markets with robust industrial and multifamily sectors. Our expectation is that European investment volumes will continue to recover during H2, and for the full year will improve by up to 5% on the 2020 performance.