The firm places the level of real estate transactions last year at some EUR 740 million. Offices covered the bulk of this sum, with EUR 382 million, followed by retail space with some EUR 285 million in deals. Retail and residences accounted for much smaller traded volumes, reaching only EUR 43 million, according to the report. Around 15.5 percent of the office stock was subject to transactions, it found.
Only a few transactions were completed in the first half of last year, but the second was much busier. “The transactions in the second half of 2006 reached some EUR 540 million. This was due to the pressure of available funds in Europe and to the fear prices would go up,” said company officials.
Most of the transactions were completed before construction works on the subject of the transactions were finished. “The pessimistic estimations on the evolution of prices, along with the lack of quality projects and the high volume of pre-leases led to such transactions,” said the CBRE specialists.
The value of transactions on the office segment increased by 124 percent last year over 2005. However, overall investments in office buildings decreased by 30 percent last year versus 2005, these investments thus accounting for half of the total investments in real estate.
Developers became interested in class B offices and the switch was triggered by the lack of quality properties, say the real estate pundits. Class B offices offer higher yields, but have a lower potential to attract quality tenants.