The European commercial property market is set to experience another strong year of sales in 2015, following on from last year when it really picked up pace and saw large investments start to come to fruition.
According to a report published this week by Knight Frank, last year the commercial market saw transaction volumes of some €160 billion (£120 billion), which marked a ten per cent rise on the year before, and this growth is only going to continue into 2015.
Knight Frank said that a significant number of investors, particularly those with large capital, are still targeting commercial property across the continent early this year. It predicts that this could mean a further rise in 2015, with transaction volumes likely to climb to as much as €170 or €180 billion for the year as a whole.
“The really good news for both occupiers and investors is that rents in most markets remain lower than their pre-recession peaks, in some cases significantly below,” said Darren Yates, head of Global Capital Markets Research at Knight Frank.
“This should provide a further boost to activity in 2015, with more occupiers looking to take advantage of good deals, while investors will seek to cash in on better rental growth prospects as the economic outlook continues to improve.”
In the last couple of years, offices have been the star performers in most European nations, but at the moment, Knight Frank said that all of the main commercial real estate sectors are really attracting interest from potential investors.
On top of this, specialist sectors such as hotels, healthcare and student accommodation are becoming more and more part of the mainstream market, with a greater number of investors now looking towards these for stronger returns.
The main cities that have seen recovery in the past year, and in the first weeks of 2015, have been Madrid and Dublin, where investors are now starting to see more opportunities. However, London remains the safe haven for those looking for steady returns.