|  13.03.2014

DTZ Research: Record volume in Q4 boosts annual retail investment volume

UK: DTZ today released its Investment Market Update report for the European retail market. The research reveals that European commercial real estate investment activity in the retail sector reached EUR34bn in 2013, up from EUR29bn registered in 2012.

The performance achieved in 2013 is far above the long term historical average standing at EUR28bn from 1999 to 2012 year-on-year.


Investors demonstrated strong appetite for retail assets especially in the UK (EUR11.1bn) and Germany (EUR9.3bn) which accounted for 33% and 27% of this volume respectively. Southern Europe posted the biggest increase in volume over the year, with EUR3bn of acquisitions recorded in 2013, up from EUR0.7bn in 2012.


Market players have continued to favour shopping centre assets which accounted for 61% of retail investment volumes recorded in 2013. As a result, shopping centre investment rebounded sharply in 2013 with volumes reaching EUR17bn, up from EUR13.7bn recorded in 2012. The UK shopping centre market was extremely buoyant, accounting for 31% of the European volume. Outside the core markets, Southern Europe recorded strong levels of activity with a total volume close to EUR1.7bn in 2013.


Adrian Powell, Head of EMEA Retail at DTZ, commented: “With Europe’s improving macro-economic outlook, we are seeing a long awaited return of consumer and retailer confidence. This positive commercial environment continues to attract an increasing supply of capital to retail markets across Europe from both Core and Value-add investors resulting in downward pressure on yields, particular in markets that have been starved of capital growth over recent years. Market players are continuing to favour shopping centre assets, accounting for 61% of total retail investment in 2013.”


Domestic investors were dominant in the shopping centre market and accounted for 54% of the acquisitions recorded in 2013. On the cross-border side, non-European investors, accounting for 27% of the total volume, have favoured a wide range of countries across the region including the core markets, the CEE and Southern Europe.


Funds remained the most dominant player in the retail and shopping centre investment markets, covering all lot sizes. On a net basis they have increased their exposure by EUR3.6bn in the European shopping centre market. Listed property companies have been mainly focused on assets priced between EUR100m and EUR500m but have remained net sellers in 2013.


Marius Grigorica, Senior Consultant DTZ Echinox:"In Romania, the volume of investment in the retail sector has increased significantly in 2013 compared to 2012 to about 190milEuro, which represents almost 60% of the total investment in commercial property. However, analysing the total volume of the European retail investment, local transactions account less than 1%, most purchases being made by a single investor. Looking ahead, due to improving macroeconomic indicators, we expect Romania to become more attractive for the foreign investors, especially for those aiming higher yields than in the West European markets."


Magali Marton, Head of CEMEA Research at DTZ, concluded: “Going forward, the retail segment is likely to continue to benefit strong investor’ interest. On the prime segment they will take advantage of the rebound in shopping centre development across the region. In this context we expect retail investment to reach EUR38bn in 2014 out of which EUR17bn-EUR18bn to be invested in shopping centres.”


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