Record first half of year for European Real Estate Investment

Investment into European real estate reached €152bn in the first half (H1) 2022 - the strongest ever first half of a year - according to preliminary data from global real estate advisor, CBRE.

Commercial real estate investment volumes were up 10% from H1 2021 and exceeded the previous H1 record of €151bn in 2018.

The record first half was driven by a very strong Q1, where total investment volumes reached €84bn. This was the second strongest Q1 behind the record-breaking Q1 of 2020. 

Q2 volumes declined 11% to €68bn, as increased borrowing costs and economic uncertainty slowed investment activity. Real estate pricing has been impacted by high inflation across the globe and central banks rate increases. The European Central Bank (ECB) is expected to increase interest rates for the first time since 2011 next week. 

Nevertheless, Belgium (+134%) and Ireland (+47%) posted a record Q2 volume. Investment volume in Belgium was driven by the sale of the North Galaxy towers in Brussels, consisting of three buildings totaling 105,000 m² of office GLA above ground. Italy (+53%), the Netherlands (+37%), Spain (+44%) and France (+24%) also posted higher volumes during the quarter. 

For the 12 months ended 2022 Q2, investment volume totaled €377 bn. Most European countries showed volume growth over this time period.

Across sectors, European office activity increased by 19% over the first six months of 2022. Industrial & Logistics was up by 15% over the same period and Residential volumes were down by 10%. European retail volumes were up by 54%, driven largely by a major portfolio sale in Spain.

Arnaud Smeets, Senior Director & Head of Capital Markets BeLux, comments: “Despite higher borrowing costs, investors retain a strong appetite for commercial real estate, particularly as a partial hedge against inflation.”