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RCA: European Real Estate Q2 Transactions Slide to Lowest Level in Six Years on Covid-19, but Germany Holds Steady

Real Capital Analytics / July 30th, 2020

London, July 30, 2020 – The volume of European commercial real estate investment transactions plunged to the lowest three-month level since 2014 in the second quarter of this year, as the Covid-19 pandemic and associated lockdowns took a grip on markets, but the completion of a handful of large deals in the period, notably in Germany, still underpinned activity relative to other global regions, RCA’s European Capital Trends Q2 2020 report shows. 

(Tom Leahy, Senior Director EMEA Analytics at RCA will expand on the ECT Q2 analysis in a webinar on Tuesday, August 4th at 09:00 BST/10:00 CET. Registration details at the bottom of this news alert.) 

Tom Leahy, Senior Director EMEA Analytics at RCA said: “In some respects the pandemic could be the perfect storm for real estate. Physical restrictions prevent property viewings and the potential economic fallout provides enough uncertainty to limit dealmaking when property prices are at record levels in many markets. However, volumes across Europe have held up much better than some other markets in North America and Asia Pacific.” 

Total European invement volume was €50.1 billion in Q2, a 32% fall on the same quarter of 2019, but the scattering of supersized corporate transactions, that were collectively at their highest level since 2017, mitigated the more sobering picture painted by the deal count. The tally of deals dropped 48% year-on-year in the second quarter to the lowest point since 2013. Transactions valued at €250 million and over made up 40% of the quarterly total, on par with Q2 2019. For properties under €20 million changing hands, the total transacted dropped by 55%. 

German transaction volumes have been propped up by ADO Properties €5.0 billion acquisition of Adler Real Estate and Aroundtown’s €4.7 billion purchase of TLG Immmobilien. The two apartment portfolios together made up two-thirds of the sales volume in Germany this year. These deals are reflective of the resilience of the German market provided by the size, scale and sophistication of the domestic investor base. 

In the UK, the Blackstone-iQ student housing deal added €5.3 billion to the second quarter total and excluding this entity transaction from the analysis would show the Q2 deal volume down 66% over the same period of 2019 instead of the 15% dip that the market registered. 

Denmark stood out as the only other country in Europe, alongside Germany, to experience a rise in real estate investment transaction volume in Q2. At the mid-year point the total was double the level of the first six months of 2019, with the €280 million sale of the Danske Bank headquarters in Copenhagen the largest single asset transaction in the national market since 2017. 

Additional takeaways: Markets & Sectors 

  • The European apartment investment market was the only property sector to show a rise in transaction volume in the second quarter of 2020 (22%) compared with the same period of last year. The total was boosted by the ADO and Blackstone platform acquisitions in Germany and the UK and also a big deal in the French residential sector. 
  • The logistics sector is seen to be in prime position to benefit from the forceful shift to online retail the pandemic has precipated and deals have continued to complete since Europe went into lockdown and pricing has held steady. 
  • The Covid-19 crisis is increasing the fragmentation of the retail sector and secondary assets are looking increasingly vulnerable, while grocery and convenience have proved more resilient. European sales of grocery stores outstripped the rest of the retail sector combined in Q2. Shopping centre volumes held up very well over the quarter, due to some very large deals, of which Unibail-Rodamco-Westfield’s €1.1 billion sale of a 50% share of six French shopping centres was the biggest. 
  • Twelve of the most active European markets in the mid-year ranking recorded a slowdown in investment for the first half of 2020, weakened by a miserable second quarter. Across the top 25 markets, volume declined by about one-third between the first and second quarters. 
  • Investment held up relatively well in Paris, with the completion of some large transactions involving domestic institutions. Several deals were forward sales, which seems to demonstrate an ongoing optimism about future prospects. 
  • Without Blackstone’s iQ student housing deal, the total investment transaction volume in London in the second quarter would have been the lowest recorded for the market by RCA since 2001. 
  • In Hamburg, Q2 was the strongest quarter for deal making since Q4 2018, lifted by the office sector, particularly Union Investment’s €185 million acquisition of the Ericus Contor building at a yield of 2.6%.This was the lowest yielding office to trade in the second quarter in Europe. 


RCA ECT Q2 Report Webinar Tuesday, August 4th 09:00 BST/10:00 CET 

Real Capital Analytics is hosting an online discussion and analysis of European commercial real estate markets during the second quarter with Tom Leahy, Senior Director at RCA, at 9 am BST/10 am CET on Tuesday, August 4th. During the webinar, Leahy will provide a summary of current market data and also look ahead to the remainder of 2020. Journalists wishing to join the webinar can register here. 

Date: Tuesday, August 4th 2020 

Time: 9.00 BST/10.00 CET Register Now > 


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