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EMEA Capital Markets | Momentum builds throughout EMEA property markets in Q3

CM snapshot Q3 sm assets  hero image

Rise in activity seen in Q2 continued into Q3, with investment volumes in major markets expected to recover further

Investment in European property continued to gain momentum in Q3 with the return of big-ticket deals in major markets across the region, according to the latest market snapshot for Europe, the Middle East and Africa (EMEA) released by Colliers International (NASDAQ: CIGI; TSX: CIGI), a global leader in commercial real estate services and investment management.

Leading cities including London, Milan, Paris and Frankfurt saw major single-asset deals in the July-September quarter, as investor confidence rebounded further from a slow start to the year. Prime office assets located in the centres of national capitals remained the major draw for investors seeking secure repositories of value.     

“The vaccination roll-out across Europe has unlocked international travel and allowed more buyers to physically inspect potential acquisitions,” said Luke Dawson, Managing Director, EMEA Cross-Border Capital Markets. “This has done a lot to improve confidence levels and encouraged investors to act on the opportunities emerging across markets and asset classes.”

Logistics assets remained a key area of focus amid steady growth in e-commerce and the supply chain constraints highlighted by the pandemic. While investors remain cautious on hard-hit retail and hospitality properties, activity is beginning to pick up in these sectors in markets like Spain. This uptick can be attributed to investors realising that as holiday-makers and business travelers return some hotel assets could be undervalued and offer a good investment opportunity now. Both retail and institutional investors continued to demonstrate strong interest in residential and particularly build-to-rent (BTR) assets in urban areas throughout the region. 

Moving into Q4, Colliers predicts markets will remain active, with investors watching for any upsurge in COVID cases in the winter months. Also, on the investment radar will be the outcome of coalition negotiations in countries that have held recent elections such as Germany and the Czech Republic, amid mounting scrutiny of investment in the residential market in cities such as Berlin. 

Regardless of short-term trends, overall sentiment is expected to remain positive as the new year approaches. “Investors clearly believe the tide has turned,” said Richard Divall, Director | Cross Border Capital Markets. “They are adjusting their strategies for a return to healthy economic growth and a focus on sustainable development that will shape regional property markets for the better in the years ahead.”

UK market remains active despite slight dip
Some £11 billion was invested in UK property sector in Q3, a 10% rise on the same quarter of 2020 – although this was still some 25% under the five-year quarterly average, and also below the £16 billion invested in Q2. Rather than fundamental weakness, the slowdown was attributed to seasonal factors such as the school summer holidays, along with ongoing travel restrictions and a ‘pingdemic’ related to the country’s COVID track-and-trace system.

Allianz megadeal shows continued allure of Germany’s financial centre
Allianz’s acquisition of Tower 1 of the FOUR development in Frankfurt for some €1.4 billion represented the largest single-asset transaction in Germany so far in 2021. Offices have no competition as the dominant traded asset class in Europe’s biggest economy, representing 50% of all deals. Retail assets trailed far behind, with 16% market share.

Investors flock to regional hubs in France
France’s regional cities are seeing a surge of capital into logistics and commercial assets, with a marked presence of foreign investors. While overall transaction volumes through Q3 are down on last year, the number of transactions has shown less of a decline, as the market has refocused on smaller deals, particularly in the €50 million to €100 million bracket.

Logistics dominates in Italy
Logistics deals accounted for almost 50% of quarterly investment volume in Italy - a new record for market, reflecting new post-pandemic commercial realities of delivery on demand. Foreign investors have dominated the Italian market in the year to date, accounting for 74% of total volume. 

Dash for hotels in Spain
With travel restrictions lifting in Europe, investors have realised that some hospitality assets may be underpriced. In Spain, Q3 witnessed frantic competition to get a slice of the hotels sector as the return of travel saw tourists flock back to Spanish beaches, with investment volumes topping €1.2 billion. Alternative assets are also attracting attention in Spain, with investors increasingly interested in data centres and residential care homes.

Download the Colliers EMEA Market Snapshot | Q3 2021 here.


Related Experts
United Kingdom

Anna Silkstone

Head of Content

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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United Kingdom

Luke Dawson

Managing Director Cross Border Capital Markets

London - West End

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 the Colliers businesses in Russia, Ukraine, and South East Europe, I relocated to the Czech Republic in 2007 to take on the role of Head of Operations for Eastern Europe.  I was responsible for the day-to-day oversight, integration and coordination of the 13 countries.  In 2012 I accepted the position of Regional Managing Director for South East Europe.  In this position I was responsible for business development, key accounts, investment sales and overall business accountability.

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 in my current role.  My focus is on driving our investment sales business across Central Europe.  This means strategically managing regional investment relationships, connecting opportunities and guiding the overall strategy of the service line.  I also have leadership responsibility for the Central Europe businesses as a whole and work closely with the local leaders to grow our businesses.

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United Kingdom

Richard Divall

EMEA Cross Border Capital Markets Director

London - West End

As Head of Cross Border Capital Markets, EMEA, I work with international clients who are interested in investing in the region and connect them with the best local Colliers expert based on their investment requirements. Conversely, I also help investors based in EMEA expand their portfolios to other regions around the world. Through my extensive connectivity in the global real estate market, I can connect capital with local expertise, regardless of location.

I work with a broad spectrum of clients including Sovereign Wealth Funds, global institutions, global private equity investors and high net worth individuals. Clients choose to work with me based on the full range of advisory services I provide including a macro view on local economies and property sectors, investor sentiment around the world and access to local buyers and sellers.

Working with local offices in EMEA, we are able to provide a full range of advisory services including:

  • Local market reports
  • Financial analysis
  • Professional services
    • Asset management
    • Building surveys
    • Valuation
  • Initial tax advice
  • Banking finance

I have over 17 years real estate investment experience and during my career I have been involved in over £2billion in transactions in the UK.


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