European commercial real estate
A total of €43.7bn was invested in European commercial property during Q2 2016, according to real estate consultant Knight Frank. Although this was a 7.5% improvement on the weak performance of Q1, it was 23.5% down year-on-year and confirmed the more subdued pace of investment activity being set in 2016. The fall in investment in Q2 was primarily due to decreased activity in Europe’s two largest markets; on a year-on-year basis, volumes were down by 50.1% in the UK and by 47.2% in Germany. There has been considerable press attention on the potential impact of the Brexit decision on European occupier markets, with cities such as Frankfurt, Paris and Dublin touted as possible beneficiaries should companies decide to relocate staff from London. However, for the time being, most occupiers appear to be in “wait and see” mode as they monitor how the UK’s withdrawal from the EU plays out. There is no evidence, as yet, of any significant exodus of occupiers from London, but the UK’s exit from the EU will be factored into occupiers’ decisionmaking over the longer term.
Analysts of Knight Frank connect decrease in the volumes of investment into Germany's commercial real estate with the fact that investors are afraid of serious volatility of the European economy. Least of all in the second quarter has been invested in shopping centers, offices and warehouses of Finland where traditionally the volume of transactions not such a huge, as in Germany or Britain. In this country the volume of investment were reduced by 72,2%, to €300 million.
At the same time the developing European markets have shown essential growth: so, in the Czech Republic the volume of investment for the second quarter of this year in comparison with the same period of last year has grown by 130,6%, to €500 million, in Romania — more than for 300%, to €300 million. Russia has attracted only €282 million for the same period, or 30,8% less than the second quarter 2015.