CBRE Dominates European Real Estate Trading

CB Richard Ellis Ltd. handled 20 percent of the €227 billion (U.S.$300 billion) in European commercial property trading in 2006. Overall, European real estate turnover in 2006 represented a 46 percent increase over 2005, according to just-released CBRE research, with Germany registering the largest country increase at 150 percent. Business there grew from €20 billion in 2005 to more than €51 billion last year.

"We did €45 billion in buy-side and sell-side transactions in 2006," Michael Strong, executive chairman of CB Richard Ellis Ltd. in London, told CPN at the MIPIM international property conference in Cannes, France, "Sixty percent on the sell side and 40 percent on our buy-side advisory business. We’ve gotten our European business groups to work as one, which has helped us build such volume."

Nick Axford, head of research and consulting-EMEA at CBRE, noted, "There are clear signs that yield compression in most markets in Europe has slowed significantly. Pricing now is being driven by investors buying into strong rental growth.

"However, yields in Germany still are fairly moderate, still in the 5 percent range for office, except in Munich, Peter Schreppel, head of international investment at CBRE in Frankfurt, told CPN. And the run in German multi-family housing, dominated by U.S. and U.K. private equity firms, has not declined at all. "There now is a whole range of buyers for residential," he said. "Private equity still only deals in the large packages, but money for smaller deals is coming in from all the countries of Europe."

Schreppel said that foreign buyers see German residential as dirt cheap, with a cost per square meter running about 40 percent less than in Spain, for example. "I met 12 guys yesterday at MIPIM interested in investing €15 to €20 million in German residential." read more

By Marshall Taylor, European Correspondent