Germany recorded €8.3 billion in transactions in Q1, down 51% year-on-year, and €64.2 billion on a rolling 12-month basis, down 10% year-on-year. By comparison, the UK slipped 22% year-on-year in Q1 but still recorded €12.5 billion, and €65.4 billion on a rolling 12-month basis.
France also experienced a slow start to the year, although on a 12-month basis cross-border investment in the country was at the highest level since 2007. In Paris, volumes declined by 35% in Q1. Generally, this market is supported by a high volume of office trades, but these were at a six-year low in the first quarter.
In the Nordics, Sweden and Finland had a comparatively strong first quarter, but this was from an exceptionally low base in the same period of 2018 and it is likely a case of these markets returning towards average levels rather than a substantive shift in trends.
In Sweden, the jump was the result of some particularly large deals including the acquisition of a €390 million logistics portfolio and the purchase of an industrial property for redevelopment in Stockholm for €352 million. Similiarly in Finland, the rise in the numbers stemmed from two exceptional deals: Kildare’s acquisition of Technopolis in a public to private entity deal and the part-purchase of Helsinki’s Jumbo Mall by Elo Mutual from Unibail-Rodamco-Westfield.
Utrecht was a notable standout in the rankings of the most active European real estate markets in the first quarter, appearing in sixth place. This Dutch city has never been ranked so highly and stood at 21st and 27th place in 2018 and 2017 respectively. The Netherlands in general performed strongly in the first quarter and €1.3 billion of residential acquisitions were completed in the market, a 40% increase on the same period of last year.
Cross-border real estate flows within Europe held up better than domestic investing and spending by non-European players in the first quarter of 2019 and over the past 12 months, reaching a cyclical high of €73 billion.
The main source of this capital is German, which probably reflects two factors: how well capitalised both domestic institutions and listed players are; and the strong competition for assets at home. Flows from Germany to France jumped year-on-year in Q1 to total €3.7 billion.
Capital from US-headquartered players was at the lowest quarterly level since 2013, but there are €5.0 billion of completed deals in the pipeline for the second quarter, exceeding the first quarter total.