Last year was a record for property deals worldwide
Europe's commercial property market sizzled last year, as demand for real estate in Paris, buoyant second-tier British and German markets and strong private equity interest in Ireland and Spain sent deals to their highest level since the financial crisis.
Europe saw 213.1 billion euros ($241.7 billion) of commercial real estate transactions in 2014, a rise of 13 percent over 2013, according to a report by research firm Real Capital Analytics (RCA) released on Wednesday.
Investor enthusiasm for safe haven Paris led France as a whole to a 31 percent rise in investment volumes. The capital attracted 74 cents of each euro invested in French commercial property market.
"Political and economic uncertainty in France deterred investors in 2012 and 2013, leaving assets in Paris attractively priced relative to the other core investment markets of western Europe," said Tom Leahy, RCA's director of EMEA analytics.
Overall investment in London slipped 3 percent as high prices led investors to British regional markets such as Manchester, Leeds and Glasgow. Commercial property sales across Britain rose 16 percent despite the London decline.
A similar trend emerged in Germany, where volumes in Berlin, Munich and Hamburg fell, while second-tier markets in the Ruhr Valley, Cologne and Stuttgart strengthened.
Most improved were commercial property markets in Ireland and Spain, where investment volumes soared 89 percent and 134 percent respectively.
Private equity funds bought into the areas as banks reduced their property exposure, while both countries introduced modified rules on tax-exempt real estate investment trusts (REITs) that saw new domestic companies competing for assets.
Domestic investors only accounted for around 53 percent of purchases by value last year, RCA said,