After several years of falling values in the commercial property market, investors are again returning to Europe with Spain, Sweden and Ireland showing the strongest growth. Hayley Platt looks at what's behind the boom.
Investing in commercial property is often described as a rollercoaster. Sometimes with more downs than ups. But the sector seems to have turned a corner. Growth in Europe in 2013-2014 rose around 35 percent year on year. A sign of greater certainty about the economy, says Michael Haddock from property investment analyst CBRE. SOUNDBITE: Michael Haddock, Director, CBRE, saying (English): "We've also had this sharp fall in bond yields in Europe over the last six to nine months and that means that the core investors, the people who are looking at really prime real estate as an alternative to bonds are also very active in the market as well. So both ends of the market are attractive at the moment." A new survey by CBRE - the world's largest commercial property investment firm - shows where investors put their cash last year. Germany's commercial property market was up by almost a third to around 40 billion euros. And it wasn't the main cities like Berlin and Munich they were looking at - it was smaller ones like Cologne and Stuttgart. SOUNDBITE: Michael Haddock, Director, CBRE, saying (English): "There was a lot of talk in Germany last year of what they called the ABBA strategy which is A locations in B cities, B locations in A cities. That's the sort of strategy you find from those return driven investors." The UK remains Europe's biggest commercial property market. And a slight fall in London investment was more than made up for by growth outside the capital. The most improved market was Spain where volumes soared 134 percent, Ireland was second at 89 percent. Sweden also gained and as did France, where property in Paris was a big attraction. Political and economic uncertainty there put investors off in 2012 and 2013. It's now seen as a safe haven, leading to a rise in investment last year of 31 percent.