Property Investment drops across Europe

Investment in property construction in Europe collapsed in the first quarter of 2009, declining 74% from the same period last year.. Construction investment came to 11.4 billion euros compared with 43.3 billion euros in the same quarter of last year, said a report issued by Cushman and Wakefield.

Foreign investment in property construction was also down sharply in the first quarter, when it accounted for just 29% of the total monies invested in Europe - compared to 43% percent in first quarter 0f 2008.

Commercial property rents declined in nearly every European country. In the year to end of March, prime rents fell 3.6 percent, the first annual drop in the sector since 2003. The CB Richard Ellis office rent index for the EU-15 area fell by 3.4% in the quarter, taking the year-on-year rate of growth to minus 4.1%. Twenty eight of the 48 locations in the survey saw prime rent falls, one location increased and 19 remained unchanged. The largest falls occurred in Kyiv (down 33% to €357 per sq m per annum) and Moscow (down 20% to €918 per sq m per annum). The only increase was in Zagreb, where rents increased by 0.8% to €211 per sq m per annum.