- February 1, 2017: Vol. 11, Number 02

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Lack of supply pushes investors toward noncore markets

by Richard Fleming

According to Savills, some noncore European commercial real estate markets saw stronger investment volume growth last year than core markets, due primarily to a lack of stock in core markets and to the impact on investor sentiment of the uncertainty caused by the EU referendum in the United Kingdom.

The share of the overall European investment market taken by noncore markets has increased gradually from 13 percent in 2007 to 35 percent last year, showing a greater willingness of investors to consider noncore markets.

Marcus Lemli, head of European investment at Savills, says: “The uncertainty caused by the EU referendum affected UK volumes, but has had little impact on continental Europe. We have now reached the stage of the investment cycle where a shortage of large-scale quality assets in key locations such as Germany and Spain has caused activity to slow in these markets, with investors looking to deploy capital elsewhere. The Netherlands, Poland and Ita

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