Germany, UK And Spain Drive Growth in European Retail Property Investment in Q3 2009

Investment in European retail property reached over .5 billion in Q3 2009, a quarterly increase of 18% and the highest total since Q3 2008, according to new CB Richard Ellis research.

Reflecting the trend in
the overall European commercial real estate market, retail
investment was heavily driven by a small number of western European markets in
the last quarter. Germany, Spain and the UK clearly dominated the market,
accounting for over 80% of Q3 European retail investment.

Germanysaw the sharpest increase in activity with .1.2 billion of retail investment
activity in Q3 – the highest quarterly total since Q1 2008. In contrast to
recent years, retail investment activity outpaced that of offices, a rare
occurrence in the typically office-dominant German market. In keeping with the
broader German market, local investors continued to dominate, with
institutional investors and German Open-ended Funds being most active.

The high level of retail
investment activity in Spainwas heavily influenced by the .1.15 billion sale and leaseback of BBVA.s high
street bank branches . the only retail deal over .1 billion in Europe this year so far. However, this level of activity
is unlikely to be sustained in a market that saw an average .810 million
quarterly retail investment even at the top of the market in 2006-2007.

The UK market also remained active
in Q3, although it is still broadly driven by local buyers mainly acquiring
retail units in the .10-20 million lot size.