DTZ has prepared a liquidity ranking of the European commercial real estate markets in 2014, which reflects the ease with which an investor can enter and exit a particular market. Liquidity in this context is defined as the relation of transaction volumes to each market’s commercial property stock.
For the second consecutive year, the United Kingdom has been the most liquid market in Europe (11,3 percent compared with the European average at the level of 5,6 percent), followed by Sweden (9,4 percent) and Finland (7,7 percent). The Finnish market’s seven-spot move up in the ranking compared to 2013 stems from a rapid increase in sales of industrial and warehouse space. Europe’s least liquid markets are Russia and Ukraine, as political instability weighs on these markets, which results in a withdrawal of capital by investors.
Poland has been ranked sixth in terms of liquidity on the European commercial property market (6,7 percent), a drop from second position in 2013. This fall in the ranking is due to an increase in investments in other markets in comparison with the amount of stock available in a given market. Poland is also ranked fifth in Europe in terms of liquidity over the last ten years, with liquidity averaging over 6 percent. Sweden is currently top of this table, with 9 percent liquidity over the past decade.
“The maturity and high liquidity of the Polish commercial property market as compared to other markets successfully attracts not only local investors, but also non-European capital. Last year, Poland was Europe’s second most liquid market when it comes to investors based outside our continent, whose share in the transaction volume amounted to 55 percent,” said Craig Maguire, Head of Capital Markets, DTZ. “Poland’s commercial property market saw a slowdown in the first half of this year. However, we expect H2 to be better; many transactions are currently being concluded, and our estimates indicate that by the end of 2015 the transaction volume will amount to around €3 billion,” he continued.