Commercial real estate deals have held strong in Europe during the Coronavirus crisis, new figures suggest.
Investment volumes in Europe, the Middle East and Africa (EMEA) in the first five months of 2020 were down just 6% year-on-year, while the volume of portfolio and entity-level deals rose.
The rise was due in part to a significant 4.7billion (€5.3billion) purchase of UK student provider iQ by Blackstone and Aroundtown’s purchase of German property company TLG.
In the Americas, overall volume is 18% down and in Asia Pacific activity is 45% lower. That is according to the latest Insight Report from Real Capital Analytics.
Dr Chua Yang Liang, Head of Group Research & Strategy, ARA Asset Management, says investors are hunkering down and preparing for recovery.
“The underlying demand for real estate as a result of the large young population and other social demographics will continue to drive the performance of real estate beyond the current doldrums brought forth by the COVID-19 pandemic.”
The decline in the Americas is deepening, falling from 3% at the end of April 2020 to 18% down at the end of May, while the drop in Asia-Pacific has remained consistent. Even though lockdown has been relaxed in China, fears of a second wave remain.
Deal counts in the commercial property sector in all three regions are down around a third.
Interest in UK commercial real estate has risen, say leading industry players, including Consorto. Consorto Chief Executive Officer Philip Verzun says, “Consorto is now seeing rising demand for commercial property investment in Europe, particularly for industrial properties. We are also receiving inquiries for value-add office buildings and hotel properties.”
Discover how fast the UK property market is recovering.