The investment volume across the 16 countries covered in our report totalled approximately €48bn in Q2, which brings the turnover for the first half of the year to nearly €102.5bn. This is the highest first six months since 2007 and almost 25% higher than the same period last year.
Cross border investment increased in nearly all countries and especially in the peripheral markets where US investors have been particularly active. Investors continue to favour core markets with the UK, Germany and France still accounting for 67.8% of the total volume, however the share of peripheral markets is rising.
Property prices continue to rise attracting more investor interest and pushing yields down. The average prime CBD office yield has dropped in Q2 15 to 4.6%, below the previous 10 year low of 4.7% in Q3 07.
Prime yields could move in further, but the lack of prime assets is likely to push secondary yields downward resulting in a reduced yield gap between prime and secondary.
We forecast an increase of at least 10% of the commercial investment activity this year and further yield compression for at least 60 % of our market.
Source : Savills