Press Releases

RCA: Covid-19 Pounds European Real Estate in Q3 as Deals Fall 43%; Logistics Sector Escapes Rout

Real Capital Analytics / October 29th, 2020

London, October 29, 2020 – Total European real estate deal volume in the third quarter of 2020 fell 43% to €44 billion compared with the same quarter of 2019, as the slump caused by the Covid-19 pandemic deepened, RCA’s European Capital Trends Q3 2020 report shows. Transaction volume in the first nine months of this year was down 19% to €172 billion.

The pandemic is speeding up major long-term trends in the European real estate investment market. The decline in bricks-and-mortar retail is worsening while the logistics sector is going from strength to strength.

Tom Leahy, Senior Director EMEA Analytics at RCA, said: “Two quarters on from the start of the Covid-19 pandemic in Europe and a clear hierarchy of investor demand has emerged. Industrial, especially logistics assets, apartments, and grocery stores sit at the top of the table; in the middle are offices, where worries over rising vacancy and falling rents seem to be holding back some investors; and, down at the bottom are hotels and large swathes of the retail sector.” 

  • At the country level, the third quarter was the slowest period for dealmaking in Germany since 2013, with the apartment sector 40% down on the five-year average, while quarterly office investment was at a seven-year low. German core office markets are historically expensive and the lack of activity may reflect a widening gulf between seller and buyer expectations on pricing.
  • In the UK, which has lagged well behind Germany in investment transaction volume for the first nine months of 2020, there was a rebound in regional property markets thanks to industrial sector deal activity, where just under £1.8 billion was spent, mostly on logistics assets. This included Legal & General’s £201 million forward purchase of a unit pre-let to Amazon. This deal represented the highest price paid for a single logistics big shed that RCA has recorded in Europe.
  • In France, third quarter transaction volume was around half the level seen a year ago, but investment activity in the French market was in line with Q2 2020 which is better than Europe as a whole. In Paris, quarterly investment totalled €3.9 billion, of which €3.2 billion was for offices.
  • In contrast to France, the Dutch market slowed considerably in the third quarter, particularly in the apartment sector, which has been the most sought-after property asset class in the Netherlands. Quarterly deal volume dropped to the lowest since 2014.
  • In the Nordic markets, Sweden, Norway, and Denmark all outperformed the European average in the third quarter. The Danish apartment sector has been particularly active with multifamily investments topping €1.9 billion in the last two quarters and many of the biggest deals have involved overseas players.

Additional Takeaways: European Capital Flows and Logistics

  • German investors have been the major source of European crossborder capital in 2020 so far, spending just over €11.2 billion. Allianz was the most active investor placing €2.2 billion, with DWS, Union Investment, Deka, and Patrizia each having committed more than €1.0 billion in the first nine months of this year.
  • Prominent new entrants to the European market in 2020 include: Cortland, a U.S.-based private investor; Vantage Data Centers, making their debut in in Newport, Wales; and, Sun Venture out of Singapore in the £177 million acquisition of Commonwealth House in central London.
  • The flow of investment into logistics properties has buttressed the industrial sector overall and it was the only income-producing property type to show similar levels of deal activity so far this year compared with 2019. Transactions in the European logistics sector have totalled €8.0 billion in the Covid era.
  • European development site sales for the construction of industrial property totalled more than €700 million in Q3, making it one of the stronger quarters on record and underlining the optimism for the sector.


Note to editors: 

Real Capital Analytics (RCA) is the authority on the deals, players and 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 and Singapore. For more information, visit 


Steve Hays, Bellier Financial 

+31 (0)20 419 0901 

Siobhan Crise, Managing Editor, Real Capital Analytics