Real estate investment volume at least €15 billion in 2020

The final real estate investment volume will be between € 15 and € 17 billion by year-end 2020, which is more than the €14 and €16 billion estimated at this year’s halfway mark. CBRE is adjusting its forecast for the investment volume for the entire year upwards, based on better results particularly in the logistics and residential real estate sectors in the first three quarters of this year.

The real estate investment volume over the first three quarters of 2020 amounts to € 9 billion. This means 32% less commercial real estate has changed hands compared to the same period last year (€ 13.3 billion). Although this decline is mainly the result of a weak third quarter, the impact of the coronavirus crisis appears to be less severe than previously predicted in CBRE’s Mid-Year Market Outlook.

Historic high investments logistics real estate

Investments in logistics real estate and residential real estate remain popular as ever. In the first three quarters of 2020, € 1.9 billion was invested in logistics and industrial real estate, an increase of 34% compared to the same period last year (€ 1.5 billion) and even a record high. The logistics real estate sector is expected to have a final investment volume of between € 3 and € 3.5 billion in 2020, compared to € 2.5 billion in 2019.

Residential investments up to between € 6.5 and 7 billion

The residential investment volume over the first three quarters of 2020 fell by 35% to € 3.7 billion. The decline is mainly due to a lack of supply. However, CBRE expects to see a change, because the transfer tax for investors is going up starting 1 January 2021 and owners have decided to market their homes sooner than planned. As a result, the residential investment volume is expected to be between € 6.5 and € 7 billion, a decline of 8-14% compared to 2019.

High investor confidence and large portfolio transactions in logistics real estate

The record volume of investments in logistics real estate in the first three quarters of 2020 is a direct result of the strong investor confidence in this sector and a number of large portfolio transactions.

“In these turbulent times, logistics real estate is a stable and safe investment sector thanks to the relatively stable rental incomes and favourable prospects. Many tenants of logistics real estate operating in the food and beverage sector, DIY sector and e-commerce have seen a rise in their turnover as a result of the growth in internet purchases. Investors have taken notice and are choosing to invest in logistics real estate as the most crisis-resistant sector,” explains Jim Orsel, Director logistics real estate at CBRE.

High demand for offices in good locations

Despite the recent rise in infections and the resulting policy measures, CBRE is expecting and experiencing a busy final quarter of 2020. In addition to logistics and residential real estate, a high demand for long-term office leases at both core and core+ locations can still be observed.