Optimism abounds in Europe’s commercial property sector, with signs all around of growing sales and also investor interest. Our news summary 4 October provides four examples of the resurgence that is being felt in all sectors.
Resurgence in commercial real estate predicted
By: Knight Frank
Summary: The UK, Germany, France and also the Netherlands are set to be among the most popular destinations for real estate investment capital. The office sector is forecast to welcome over half of all cross-border investment volumes in 2022, driven by income-focused strategies. That is according to the 2021 Active Capital report. The retail and hotel sectors are also likely to rebound, while private equity funds and investment managers will chase the ever-growing logistics sector. As the world learns to live with the pandemic, we expect an extended resurgence in global real estate investment.
Key quote: Neil Brookes, Global Head Of Capital Markets, says, “Cross-border investment is back, and we predict that 2022 will see a record year of activity. We predict both a more active and a more responsible global real estate investment market.”
SEGRO and Schroders swap property
Summary: SEGRO plc and Schroders have completed a property swap. SEGRO has acquired from Schroders a 256,000 sq ft urban warehouse estate in West London for £140 million. Schroders has also acquired from SEGRO a portfolio of UK big box and urban assets. They total 880,000 sq ft for £205 million. The balance of £65 million has been paid by Schroders. SEGRO has acquired Matrix Park, a fully let urban warehouse estate in Park Royal, West London. The estate also includes a 1.4-acre development site. The portfolio acquired by Schroders consists of two stand-alone, fully let big box assets. These are in Hams Hall, Birmingham and Brackmills, Northampton as well as four urban assets including multi-level warehouse X2 close to Heathrow Airport, Oakwood in Park Royal, Advent Way in North London and a cross-dock warehouse in Radlett.
Key quote: David Proctor, Managing Director of Group Investment at SEGRO, says, “This off-market transaction has allowed us to acquire a significant multi-let industrial estate in one of our core markets, offering strong rental growth potential as well as a medium to long term redevelopment opportunity. At the same time, we have been able to divest a number of relatively small holdings, all of which were earmarked for disposal in the near to medium term.”
Return to the office underway
By: Cushman & Wakefield
Summary: Four in 10 workers around the world have already returned to the office. With Delta variant COVID levels predicted to peak around November, most office workers will return to the office in the first quarter of 2022, says the Predicting the Return to the Office Report.
Key quote: “The majority of companies in Europe have indicated September or October for a concerted move back to in-office working. Those that have taken a longer view have cited January 2022 as the targeted timing. This will vary based on continued growth in vaccination levels, opportunity to take a third booster vaccine and industry mix. Occupiers in the finance, banking and law sectors are more likely to be returning throughout the remainder of 2021, while technology firms (at a very generalized level) are delaying until January 2022,” says the report.
Northern Ireland market bouncing back
Summary: The commercial property market in Northern Ireland is bouncing back. As a result, it is likely to notch up around £300m in transactions in 2021. Around £234 million of investment activity has been recorded so far this year. There is another £66 million under offer or on the market. in 2021, sales reached £136 million.
Key quote: Gavin Elliott, Senior Director, Capital Markets at CBRE NI, says, “Over the year we have seen a dramatic increase in investor appetite for properties across all sectors, which has been primarily driven by the low interest rate environment and the continuing improvement in the occupier markets and the wider economy.”
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