Signs of interest in value-add and better quality secondary opportunities

London, 18 May 2010 – European commercial real estate investment turnover is expected to reach more than €100 billion in 2010, a significant increase on the €73 billion reported in 2009, according to the latest CB Richard Ellis (CBRE) European Capital Markets report. Trends in the European real estate market so far in 2010 have been increasingly positive, although largely confined to the prime segment of the market, with increasing lender confidence, value recovery, and growing investor demand all helping to drive transaction volumes and size.

The improvement in the lending market is particularly notable. Whilst there have been relatively few changes to key lending terms, there are some signs of greater lender confidence. These include growth in the availability of development finance and the offer of mezzanine finance at a more attractive price. The latter is particularly important, as it reflects the trend that both investor and lender interest in value-add and better quality secondary opportunities is starting to increase. As senior debt lending remains conservative, more opportunistic buyers will be looking to finance using a combination of senior and mezzanine debt.

While CBRE expects the European property investment market to see more than €100 billion transacted in 2010, the extent to which value-add and opportunistic investment increases will have a large bearing on the actual outcome. Thus far, the UK and increasingly France have been the two markets to see investor demand expand into these secondary segments. Now, however, there are the first signs that other major western European markets are also starting to attract more opportunistic buyers.

Jonathan Hull, Executive Director of EMEA Capital Markets, CB Richard Ellis, said: “Restricted by lack of product, a lot of investor demand remains unsatisfied, prompting investors to start actively considering value-add opportunities. Driven by either better economic and occupier fundamentals or simply by a distressed opportunity, a number of value-add investors have made their first acquisitions in western European markets other than the UK and France. Germany, Poland and Spain look to be the next group of markets where the recovery in investment activity in the value-add segment of the market is expected later this year and into next year.”

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For further information please contact:

Marie Hunt
Executive Director CBRE Ireland
t: +353 1 6185543
e: marie.hunt@cbre.com

About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2009 revenue). The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company for three years in a row. Please visit our website at www.cbre.com.

In Ireland, with offices in Dublin and Belfast, CB Richard Ellis is the country’s largest commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, project management, consultancy, valuations and research. CB Richard Ellis Ireland has been listed among the top 50 Best Workplaces in Ireland, 2010, for the sixth year running. Please visit our website at www.cbre.ie or www.cbre.ie/ni

European Capital Markets Q1 2010
European Capital Markets Q1 2010