Non-residential property investment in the 14 largest cities in Western Europe such as London, Paris, Berlin, Hamburg, Frankfurt, Munich, Brussels, Milan and Madrid reached €48,600 million at the end of the third quarter 2014, a 16 per cent rise in annual terms. Dublin (up 202 per cent in a year) and Madrid (up 180 per cent) lead the list, according to data in a BNP Paribas Real Estate report.
Total property investment over the first three quarters in the main European cities is the highest since 2007 and the volume exceeds that seen in the yearly totals for 2008, 2009, 2010 and 2011. With the exception of Milan and Lisbon, property investment in all the cities is higher than the average for the last five years. Regarding foreign investment, investors from North and South America account for a bigger share than European investors, also for the first time since 2007.
Most global investment is concentrated in liquid and core assets, although the number of value added and speculative operations is growing. This change in market trends may help lay the foundations for future investment growth while undercutting profit margins. In the third quarter, in half of the 14 European markets studied, ‘prime’ profits recorded a decrease.
In terms of sectors, offices have been the star assets with a growth in investment volume well above the average for the last five years in all cities except Lisbon where it has remained stable. While retail investment has increased in Paris, Dublin and particularly Madrid.