Commercial real estate continued to outperform all other sectors at the pan-European level in 2011 according to the latest release of data from CBRE's European Valuation Monitor (EVM).
The EVM report, which is based on regular valuations of standing investment portfolios, carried out by CBRE's international and national valuation teams, showed that retail real estate in Europe grew in value by 1.5% on average in 2011. This was despite a slight decline of 0.2% in the final quarter. According to the firm Q4 became the 16th straight quarter that retail real estate has been the top performer in European real estate.
According to Andrew Barber, Senior Director, Valuation & Valuation Services for the firm the combination of retail's defensive characteristics and investor strategies focussing on Central and Eastern Europe as well as Germany were not only the main contributory factors in the capital growth, but also led to a 4.9% growth in retail investment volumes (to 38 billion Euros) in Europe last year as well.
Barber also said that 2011 was the third year on aggregate that retail real estate has outperformed other sectors in terms of capital growth. "The defensive characteristic of good quality retail will continue to be favoured by risk-averse investors. This, combined with a growing interest in prime high street retail units - pricing competition for which has accelerated towards the year-end in markets such as London and Paris - gives reason to believe that further value appreciation can be expected as the evidence feeds into valuations," he said.
And it isn't like retail real estate is only just scraping past the post first, in fact the 1.5% rise in retail values compares to flat values across all sectors, a 0.5% growth in office values and a 4.5% decline in industrial values.
- Thursday 15 March 2012