European retail real estate investment increases 34%

Direct investment in retail real estate in Europe during the second quarter of 2011 reached €4.9 billion while total investment volumes for the year to date now stand at €13.6 billion, 34% up over the same period last year, according to figures from Jones Lang Lasalle.

The majority of investment activity remained focused on the UK and Germany, accounting for 56% of total volumes over the quarter, while transactions in Sweden totalled €572 million as the region continued to attract significant interest. Sweden has already surpassed transaction volumes levels recorded for the entirety of 2010, exceeding €896 million in the first half of this year alone.

A number of growth markets saw increased activity over the quarter with volumes in Russia at €432 million and Poland at €332 million boosted by some key transactions, most notably the €278 million purchase of Gorbushkin Dvor and Filion Shopping Centre in Moscow by MTZ Rubin and the €171 million acquisition of Promenada Shopping Centre, Warsaw by Atrium.

‘Current investor demand remains focused on the core European markets of France and Germany but we also expect Poland and CEE to witness significant investment volumes by the year end. Investors driven by higher returns are focusing on the growth markets of Russia and Turkey which provide prospects for rental and turnover growth as well as potential for yield compression,’ said Jeremy Eddy, head of EMEA Retail Capital Markets at Jones Lang Lasalle.

Source: Property Wire