Press Releases

European Commercial Property Investment Rises in Q3 2021 as Market Continues Recovery from Pandemic Shock – RCA

Real Capital Analytics / November 1st, 2021

London, November 1, 2021 – Commercial property deal volume rose in the third quarter of 2021 compared with a year ago and approached pre-pandemic deal activity levels, boosted by industrial and apartment sector sales, the latest Europe Capital Trends report from Real Capital Analytics reveals.

Third quarter European transaction volume climbed to €64.4 billion, a 21% increase on the third quarter of 2020 when dealmaking was impeded by Covid-19 restrictions and uncertainty. For the year so far, total commercial property sales reached €202.6 billion, up 8% compared to the first nine months of 2020 and 5% lower than the average for the same period in the years 2015 to 2019.

Tom Leahy, RCA’s Senior Director of EMEA Analytics, said: “It is clear the restrictions on dealmaking, which caused property investment transactions to fall to their lowest level for seven years in the middle of 2020, have eased. The deployment of the Covid-19 vaccine and the opening up of society has encouraged buyers to return to market and deal volumes are comparable to those recorded pre-pandemic.”

Across all of Europe, investors bought €41.6 billion of industrial properties in the first nine months of 2021, a total 85% higher than the pre-pandemic average. The accelerated adoption of online shopping has spurred investor interest in the warehouses required to store and ship goods. The U.K. is the continent’s leading industrial market and investors spent €14.7 billion on U.K. industrial property in January to September.

The apartment market also flourished in the third quarter, with sales increasing to €14.3 billion, a 39% year-over-year increase. Berlin is the top apartment market in Europe for the year so far, with London in second and Copenhagen in third.

The picture was not so sunny for the office sector. Sales rose 9% from a year ago but were down by 26% compared to the pre-pandemic average. Sales of Paris offices so far this year have been subdued, falling by 34% versus 2020. Investors have pivoted away from the office and retail sectors towards apartment, industrial and certain alternative asset classes.

The U.K. was Europe’s number one country market in terms of transaction volume for the quarter and for the year to date, and London regained its position as the top city market. London also became the top global destination for cross-border capital, driven primarily by spending from North American investors.

Germany slipped to second place in the country rankings but there are just under €37 billion of pending deals in the pipeline, including a couple of supersized deals in the residential sector. Year to date, deal volume in Germany has totaled €48.5 billion.

The standout markets of the year so far were Sweden, Norway and Denmark, where deal volume surpassed pre-Covid averages. Apartment sector sales were the key driver of the increases.

Tom Leahy, RCA’s Senior Director of EMEA Analytics, said: “The fourth quarter of the year is typically the busiest of the year and there are some very big deals in contract that, if completed, should further buoy activity. However, there are headwinds that investors still have to deal with: the rise of inflationary pressures; the future of the office sector, where demand is strong for the best quality assets but much weaker elsewhere; and the possibility that governments will reintroduce restrictions to combat any winter spread of the virus.”

Tom Leahy, RCA’s Senior Director of EMEA Analytics will discuss these trends and more in a Real Capital Analytics webinar on November 9. Journalists wishing to join the webinar can register here.


Note to editors:
Real Capital Analytics (RCA) is the authority on the deals, players and the trends that drive the commercial real estate investment markets. Covering all markets globally, RCA delivers timely and reliable data with unique insight into market participants, pricing and capital flows. The most active investors, lenders and advisors depend on RCA’s market intelligence to formulate strategy and to source, underwrite and execute deals. An industry pioneer since 2000, RCA has offices in New York, San Jose, London, Singapore and Sydney. RCA is owned by MSCI, a leading provider of critical decision support tools and services for the global investment community. For more information, visit:

Siobhan Crise
Managing Editor
Real Capital Analytics
+1 646 395 2086