Germany and Central Eastern Europe (CEE) reported investment turnover growth across commercial real estate in H1 2020, despite the effects of Covid-19 in Q2, according to Savills latest European Investment Spotlight.
Data from the international real estate advisor shows that Germany was the most resilient country recording a rise of 31 percent in investment transactions compared to the first six months of 2019 which, in terms of volume, translates to €10 billion of additional investment. Other countries reporting investment turnover growth include Luxembourg (173.1 percent), Portugal (42.2 percent), Czech R. (11.2 percent), Poland (4.6 percent) and Romania (3.2 percent).
At the other end of the spectrum, Ireland (minus 44.5 percent), Norway (minus 38 percent) and Italy (minus 29.5 percent) underwent the strongest investment drops.
“As expected, due to lockdown restrictions, the volume of non-domestic capital reaching the European real estate market decreased. Nevertheless, in recent months we have seen increasing activity from investment managers and a rising number of joint venture acquisitions or entity deals enabling international funds to invest abroad. Additionally, whilst Asian investment activity into Europe has been rather muted, American funds which often have a footprint in Europe remain active,” Oli Fraser Looen, Joint-Head of Regional Investment Advisory EMEA, Savills, commented.
“During downturns, opportunistic funds are the first to start hunting for discounted stock with a growth potential. This time, however, we are seeing in Poland a heightened level of activity by core funds targeting assets let to strong covenants on long-term leases. With investors’ demand at an all-time high, there was virtually no upward yield movement in the industrial sector, while transactional office yields tended to be about 5 percent lower in recent months,” Marek Paczuski, Director, Deputy Head of Investment, Savills Poland, said.