By Tom Leahy on May 2nd, 2019
Europe’s major property markets stumbled in the first quarter of 2019, as high pricing, difficulty in sourcing suitable assets, and political and economic uncertainty weighed on activity. Amid the slowdown, the apartment sector consolidated its position as Europe’s second largest asset class ahead of the troubled retail sector, the latest edition of Europe Capital Trends shows.
In the first quarter of 2019 investors spent €2 billion ($2.4 billion) more on apartments than they did on retail properties. The change in relative investor appetites registered in annual volumes for the first time in 2018. Offices remain the biggest asset class in Europe.
At the vanguard of this trend is the U.K., where quarterly retail investment slumped to its lowest ever level at the start of the year. Here, the market was sustained by investment outside of the traditional commercial sectors and into property types including apartment and hotels. These non-traditional assets accounted for more than 50% of the U.K. commercial real estate volume in the first quarter.
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