Real Estate investment momentum across Europe
The Real Estate market continues to recover his traditional representative strength across Europe, as reflected in the numerous deals accomplished during Q3 2021. In particular, prime Office assets continue to be the most attractive investment opportunity for core investors; followed by logistics assets, which remain a very desirable asset class thanks to the growth of e-commerce and the supply chain challenges experienced nowadays.
Real Estate investment markets across the eurozone are nearly back to pre-Covid levels, with direct investment volume forecasted to be only 10%-20% below the annual average of the 2015-2019 period. This is evidenced in greater take-up levels in Q3 2021, were more than 4 million sq.m. were contracted in Europe’s 32 main markets, in line with Q3 2020 figures. Prime office yields compressed further 4bps to 4.21%, lower than Q3 2020 recorded figure (4.23%), just before the Covid-19.Following this trend, from CG Capital Europe, we are expecting yields compression over the remaining months of 2021.
Investment volumes across Europe recorded strongest figures, as a consequence of a 59% y-o-y increase in Commercial Real Estate investment volumes in Q3 2021. YTD 2021 investment volumes in Europe are up 11% against Q3 2020, with The UK, the Nordics, Spain and Germany leading this recovery. Particularly in Spain, at CG Capital Europe we are experiencing a much intense activity in the Real Estate market as also reflected in the total direct investment volume figure up to Q3 2021, reaching c.€8.3 billion, representing a 22% y-o-y increase. Continuing this trend, we expect the Spanish Real Real Estate Market will achieve the most optimistic forecasts of.€10.5 to €12 million investment volume by the end of 2021.