European commercial real estate investment volumes forecast to reach €230b in 2019

European commercial real estate investment volumes are forecast to reach €230 billion ($259 billion) by the end of the year, which would mean more than €200 billion ($225 billion) will have been invested in European commercial property for the sixth consecutive year, according to Savills.

The United States accounted for 48 percent of the non-European volume recorded in 2018 at €27.4 billion ($30.8 billion).

Singaporean investments in Europe almost doubled from €2.9 billion ($3.3 billion) in 2017 to over €5.6 billion ($6.3 billion) in 2018, accounting for 10 percent of the total overseas volume and making them the second biggest non-European investor group. South Koreans invested €5.4 billion ($6.1 billion) in 2018, up from €4.89 billion ($5.5 billion) in 2017, the third biggest investor group.

Marcus Lemli, head of European investment and CEO of Savills in Germany, said: “We expect the majority of European commercial property yields to remain fairly stable over the next six months. We are seeing South Korean and Singaporean investors, in particular, increase their investment volume and expect South Korean activity in continental Europe and, increasingly in secondary locations, to grow in 2019. While offices will continue to be the asset class of choice, industrial and logistics assets across Europe continue to attract investors, particularly those from the United States. Income and rental growth opportunities are becoming the two main drivers for investors’ returns across all sectors, which requires more in-depth and granular analysis on a city area by city area level.”