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European CRE proving resilient in the face of macro headwinds

EMEA CRE withstands Russia’s invasion of Ukraine in Q1, but future impacts unclear

The first quarter of 2022 was dealt a devastating shock by Russia’s invasion of Ukraine - despite this, market resilience and historically high levels of dry powder continued to support investor interest in commercial real estate (CRE) in Europe, the Middle East and Africa (EMEA) according to the latest Capital Markets snapshot for the region released by Colliers.


The snapshot nonetheless indicates that in Q1 investor interest in CRE continued to recover from the pandemic, with many investors seeing property as a hedge against rising inflation. Provisional figures for the first quarter suggest a 5% rise in volumes from the same quarter of 2021, with rolling 12-month volumes up by 7%.


Colliers notes that the shock to global supply chains and commodity markets has exacerbated inflation that was already rising rapidly. “Inflation is being felt in the construction industry, among others,” said Luke Dawson, Managing Director, EMEA Cross Border Capital Markets, “More costly materials have added some unpredictability into the development of new housing and commercial property.”


Both occupier and investor performance has been strong across most European markets in Q1, with renewed confidence in the office sector. “One of the businesses leading the charge was internet giant Google, which closed a £762.5 million deal for London’s Central St Giles development and a €583 million transaction for The Warsaw HUB office complex in Poland’s capital. This points to long-term post-pandemic confidence in the region’s office markets,” explained Richard Divall, Director, Cross Border Capital Markets.


Hotels and leisure, which were hit hard by the pandemic, but have been on a clear revival path since mid-2021, with Southern Europe, in particular, seeing renewed interest. Spanish hotels attracted €1.1 billion of investment in the first quarter of 2022 – more than in the entirety of 2020. “Travel restrictions are easing across the globe, and investors have been anticipating pent up consumer demand for leisure travel to drive a strong recovery in hotel markets during 2022. However, the sharp rise in the cost of living could dampen some of this interest as household budgets come under pressure” said Luke Dawson, Managing Director, EMEA Cross Border Capital Markets, “That said, we anticipate higher-end leisure destinations to maintain their appeal, with hotel occupancy rates for the 2022 holiday season closing back in on pre-pandemic levels.”


Germany posts another stellar quarter
Investors ploughed a record €18.2 billion into Germany’s CRE sector in Q1, three-quarters of it in the form of strategic corporate acquisitions in crisis-resistant sectors such as DIY and food-anchored specialist retail stores. The trend of investment into industrial and logistics properties remained clear, with the segment in second place behind offices in terms of investment volumes.


UK returns to form

Colliers notes “mountains of capital” pursuing CRE deals in the UK, with the lifting of travel restrictions in many parts of the world bringing global investors back to the British market. Investment volumes reached £13 billion in Q1 2022, up 10% on last year and in line with the 10-year average. One notable trend was a resurgence of interest in shopping centres, which saw the highest quarterly investment volumes in five years.


Italy sees a record opening to 2022

Q1 in Italy saw investment volumes reach a record €3.1 billion. This reflected the closing of the massive Project Dream portfolio of offices, industrial and logistics properties, retail sites, living spaces and hotels for €842 million. Most of the 68 properties are in Milan and fall into the value-add category, with strong refurbishment potential.


Poland sees marked improvement, but outlook uncertain

Despite Russia’s invasion of neighbouring Ukraine in February, Poland posted a strong quarter, with €1.5 billion of investment recorded, which is up significantly year on year. However, Colliers expects Western investment to become more selective as the year goes ahead, leaving investors from Central and Eastern Europe to continue their growth trajectory.


Quiet start to the year in France

Investment volumes declined 7% year-on-year in France in Q1, amid geopolitical uncertainty related not only to the Ukraine war but also the French presidential election. Activity in the greater Paris region was particularly subdued. Offices remained the main driver of the investment market, representing nearly 80% of activity.


Download the Capital Markets Q1 2022 Snapshot here.


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Anna Silkstone

Head of Content

EMEA Marketing

London - West End

Anna is an experienced B2B marketer, communications and business development adviser. She specialises in content creation and the resultant campaign output. In her role as Head of Content, EMEA she develops compelling communications for multi-channel direct and social marketing, media and internal communications. This is done in partnership with the business line leaders, research, digital and creative leads.

Anna has developed all of her career experience in the real estate industry. This has included leading on market response campaigns, thought leadership content development, research report identification, production and launch, client engagement and market profiling campaigns, proposal responses and bid presentation management, value propositions for marketing material, trade show presence, stakeholder management, internal and external communications, and building a remote-working marketing team. 

Prior to Colliers Anna worked at the global law firm, Dentons LLP as a Senior Business Development Manager for the Real Estate team and latterly as Head of Campaigns for the UKIME region, focusing on Environmental, Social and Governance. Anna also worked at CBRE for over two years and supported the Occupier Services section of the EMEA business. Before CBRE, Anna was at Lambert Smith Hampton for nearly nine years in a regional marketing role and later as a UK campaign manager. 

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Luke Dawson

Head of Global and EMEA Capital Markets

Global Capital Markets & EMEA

London - West End

As of 2021, I took on the leadership of our EMEA Cross Border Capital Markets team, based in London.    We look to support global investors with accessing opportunities across the region as well as leveraging our local relationships into the wider region.  It is a client-led approach  across asset classes and countries formulated on the idea of matching our structure to how investors view the markets.  We look to build relationships at the decision maker level by meeting capital in their home countries on a regular basis and really understanding their long-term objectives.

I started with Colliers in 2003 working as Director of Corporate Development with a focus on mergers and acquistions across the globe.  After leading the acquisitions of several Colliers businesses across Europe, I relocated to Europe in 2007 and took on several roles across the business in both regional management and Capital Markets capacities. During this period I was responsible for  business development, key accounts, investment sales and overall business accountability across our Central and Eastern European businesses.

In 2014 I left Colliers to run one of the largest private family offices in the middle east.  This involved leading all asset management, acquisitions and dispositions across the globe and the overall leadership of the organization. 

In early 2017 I returned to Colliers to take on the regional management and Capital Markets leadership across Central Europe.  My focus was on driving our investment sales business across Central Europe as well as strategic leadership of the overall  Central Europe business.


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