Tenerife Property

Commercial real estate on the rise throughout Europe

European real estate transaction volumes could rise as much as 30 percent to around 90 billion euros ($124 billion) this year as credit markets thaw and prices stabilise, according to a report by broker Jones Lang LaSalle.

Appetite for commercial property is returning, with 24.6 billion euros of deals done in the last quarter of 2009, more than double the 11.6 billion euros in the first three months of the year, the report said. “The growth we are expecting to see this year will be fuelled by an improvement in the availability of debt, the recognition that pricing has probably hit or even passed its floor, slightly more appetite for risk-taking, and more assets coming to the market,” Jones Lang director Chris Staveley said.

The data, published on the eve of MIPIM, Europe’s largest property trade fair, highlighted a revival in confidence among key real estate players after a two-year decline.

However, even if the total volume of deals hits 90 billion euros, Staveley said Europe’s commercial real estate investment market would still be modest in size in historical terms, roughly in line with 2002 levels.

“A weak economic outlook sets the backdrop for difficult occupier markets almost everywhere, and despite some markets seeing some recovery in prime rents, caution and risk aversion will remain key themes in the market in 2010 for investors and occupiers alike,” he said.