Retail real estate investment remained strong throughout the summer across Europe, despite the volatile recovery and economic headwinds that continued to face the sector. Direct investment in retail real estate in Europe during Q3 reached EUR 6.7 bn, up from EUR 4.9 bn in Q2 2011 and significantly up on the EUR 3.8 bn transacted in Q3 2010.

Total investment volumes for the year to date now stand at EUR 20.4 bn, up by 45% over the same period last year, almost on a par with total 2010 volumes and far exceeding full year volumes of EUR 12.3 bn in 2009.

Appetite for retail remained strong, accounting for 30% of all commercial real estate transactions in Q3. Shopping centres remain dominant within the sector, accounting for 66% of total retail investment volumes.

The majority of investment activity remained focused in the UK and Germany, accounting for 50% of total volumes over the quarter. Transaction volumes in the Czech Republic totalled EUR 603 mln, boosted by the largest transaction of the quarter, Meyer Bergman and Healthcare of Ontario Pension Plan’s purchase of Forum Nova Karolina in Ostrava and Forum Usti Nad Labem for EUR 300 mln from Multi Development.

JLL expects demand for prime retail to remain relatively strong during Q4 and is forecasting an outturn for 2011 to exceed EUR 28 bn, up by at least 35% on last year and significantly above 2009 (EUR 12.3 bn).