€100m-plus deals drive strong real estate investment activity in Q4 2010

Please see PDF link to download the full CBRE MarketView_Capital Markets_Q4 2010 report further below and or click on the thumbnail image across to view chart ref: Number of €100+ million transactions recorded in European real estate market, 2009-10.

London, 23 February 2011 – European commercial real estate investment activity jumped in the final quarter of 2010 to €38.6 billion, representing a 57% increase compared to the third quarter (Q3) of 2010, fuelled by strong growth in the number of large transactions being completed.

The latest data by CB Richard Ellis (CBRE) uncovered an increase in the average size of transactions in Q4 2010. In total, there were 79 individual transactions of more than €100 million concluded during the quarter – the highest quarterly total since the first quarter of 2008. The trend was even more evident for the very largest transactions, with more deals of over €500 million completed in Q4 than during the rest of 2010 put together.

This rise in the number of large transactions is significant in that it illustrates several growing influences and trends in the European real estate market: The number of active investors with sufficient equity to transact deals of this size without substantial amounts of debt; and the geographic concentration of liquidity for large transactions.

Significantly, nearly two thirds of all the €100 million-plus deals completed over the last two years have been in the UK, France or Germany. Furthermore, at a city level, London and Paris dominated these larger transactions, with no other individual city recording more than 10 transactions of more than €100 million over the last two years.

Michael Haddock, Director of EMEA Capital Markets Research, CBRE, commented: “A feature of the boom was the high proportion of total investment turnover that was in very large lot sizes - and the absence of these deals was equally prominent during the downturn. Changes in the market’s willingness to transact deals of this size are a further sign of investor confidence in the real estate market.”

“Jonathan Hull, Head of EMEA Capital Markets, CBRE, said: “Although the market as a whole is dominated by equity, there are all types of buyers involved in these larger transactions, including Sovereign Wealth Funds, insurance companies, pension funds, listed property companies and property funds. A growing trend has been for capital sources to partner one another, matching capital from one source with expertise from another.”

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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 2010 revenue). The Company has approximately 31,000 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. Please visit our website at www.cbre.com.

Sources: In addition to CB Richard Ellis, data for this release is drawn from KTI, Property Data and Realia Management

CBRE MarketView_Capital Markets_Q4 2010
CBRE MarketView_Capital Markets_Q4 2010