Volume of commercial real estate investment in European countries 2020-2021

Investment companies usually decide to specialize in one of the following markets: residential or commercial property. While residential real estate investments can sometimes be seen as less risky, commercial investments suggest higher cash flow potential and often provide better returns on investment, which also makes them an attractive form of investment.

Value of commercial investment

Under the impact of the coronavirus (COVID-19) pandemic, commercial real estate investment volumes in Europe fell substantially in 2020. Nevertheless, in 2021, investment activity picked up across most of Europe. In the UK, commercial real estate investment surged from approximately 47 billion euros to 67 billion euros. There are many risks when investing in commercial properties: higher sensitivity to economic conditions, influencing businesses, vulnerability to changes in supply and changes in local infrastructure, as well as the longer time it takes to find a tenant once the property becomes vacant.

Commercial investment in Europe

As of the second quarter of 2021, industrial real estate was the submarket with the best twelve month capital value performance in Europe. Germany and the Nordics were the countries with best twelve month capital value performance at 3.4 and 2.9 percent, whereas in France, capital fell by one percent. Unsurprisingly, London, Berlin, and Paris topped the ranking of the cities with highest prospects according to investors and developers.