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At a Glance - European Capital Markets - Q4 2021

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Investment back at pre covid-19 levels

Commercial real estate investment in 2021

Investment accounted for €273bn in 2021 (+14% vs 2020). Q1 2020 was the last pre-covid period, so Q1 2021 shows a weak turnover compared to it. Investment activity from the second quarter benefited from reduction in movement restrictions that along with the vaccination program facilitated deal making. Overall, the whole year turnover is comparable to those of the pre covid-19 period (2017 and 2018).

 

Origin of foreign commercial real estate investment to Europe

Foreign investment was impacted by the crisis but recovered over 2021. European investment was less affected and increased by 7%. Americans showed a strong interest in Europe in 2021 and brought their investments back to pre-crisis levels. On the other hand, Asia Pacific and Middle East investors were not very active in 2021. They represented 8% and 4% of cross-border investment, which is low considering Asians represented 20% back in 2019.

 

Prime yields

The downward trend in office prime yields, ongoing for several years, slowed down or halted in most markets in 2020. Compression now seems to have resumed in most markets though. European prime retail yields have stabilised but showed upward movement in some markets such as Paris, Amsterdam and Warsaw. In contrast to retail, European prime logistics yields continue to decrease in most markets.
 

 

AAG European Capital Markets Q4 2021
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