EXPO: EMEA transaction volumes are set to exceed the 2006 pre-crisis level next year, hitting €210bn, according to DTZ.
The forecast is based on the firm’s recent Great Wall of Money report, which shows that new capital targeting Europe grew by 11% to €111bn in the past six months.
The firm has also revised its forecast for total transactions this year, which it now predicts will top €175bn.
This 22% increase in 2013 is based on strong activity in the first half across most of the region, led by Benelux, France, southern Europe and the UK, and some pending portfolio sales for the remainder of the year.
DTZ reported that domestic investors increased their activity over the first half, gaining share from overseas investors.
Nigel Almond, head of capital markets research, said: “Investors seem to be more focused now to deploy their raised capital then before. This is partially based on expectations that interest rates could start increasing next year.
“However, based on our Transaction-Based Price Index, we are not yet seeing the increase in volumes pushing prices up across all of Europe, with the UK as an exception.”
Magali Marton, EMEA head of research, said: “Even if higher interest rates reduce the relative attractiveness of European property, we do expect there to be a delay in investors’ ability to react to this a relative re-pricing.
“The prevalent fund structure in Europe creates a fee dependency which is likely to push managers to invest rather than return capital, when relative value moves away in the short term.”
