Spending on commercial drops

The amount of money spent on commercial property in Europe has fallen by more than a third in the first quarter of 2008, as continental markets caught up with the problems affecting the United Kingdom.

Turnover European Investment amounted to € 37 billion (£ 30bn, $ 59bn) in the first quarter of this year, according to research on Friday from CB Richard Ellis, against 58 billion over € the last quarter of last year.
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Low levels of activity were reported in most of continental Europe, according to the officer, while the United Kingdom was one of the least affected, in part because that is where the slowdown was more apparent early.

The real estate market investment is dependent on debt markets to fund acquisitions, and the shortage of loan facility has had a huge impact on the level of activity. This was most obvious on the British market, where prices have fallen sharply as a result, but Europe has been more resistant to date.

"The European market investment has begun to see a correction in prices in the area during the first few months of the year," said Michael Haddock, director of research at CB Richard Ellis, "with the first segment of the market who seen moving outward yield somewhere between 25 and 50 basis points. "

In the UK, sales remained at a similar level in the fourth quarter, around € 10 billion. The UK has experienced a correction in pricing than other markets, "said CB Richard Ellis, and lower prices have already begun to attract the interest of investors.

The continent's two largest markets - Germany and France - saw lower volumes than in the previous quarter or in the equivalent period of last year.

Yields in France remain among the lowest in Europe, which means that buyers are waiting to see if the values follow the United Kingdom. Activity in some markets remained healthy, however, including Finland and Italy.