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News Release

London, Prague

Direct Investment in European Commercial Real Estate Q1 2009

Volumes Down but Signs of Improving Sentiment

London, Prague, 20th April 2009 - Direct investment in European commercial real estate reached €12bn in Europe in Q1 2009, down 30% on volumes in the previous quarter and 70% lower than Q1 2008, according to new research from Jones Lang LaSalle. Core Western European markets accounted for 95% of total investment volumes, whilst Central and Eastern European markets saw very little activity.

Tony Horrell, Head of European Capital Markets at Jones Lang LaSalle said: “In the first quarter of 2009 we have noted improving sentiment and increased bidding; in the last three months we have seen investors seeking high quality and long term good income. However there is a lack of good prime product and at the same time the accepted definition of the prime asset class has narrowed considerably.  Whilst yields in some markets moved out marginally in the last quarter, yields in many markets remained stable, for example in the City of London, Amsterdam, Frankfurt, Hamburg, Munich and Paris. This genuine interest from some investors is a positive sign but only time will tell if key deals will sign in the coming months.”

In the UK direct commercial real estate investment volumes were €4.4bn in the first quarter of 2009, a slight upturn (4%) compared to the previous quarter, and largely accounted for by transactions in the central London market. In Germany €1.6bn was transacted in the quarter, down almost 50% on the previous quarter; the lack of transactions reflecting a ‘wait and see’ attitude from domestic investors who have not been forced into distressed selling as well as the lack of debt required to fund larger transactions.  Investment activity in Central and Eastern Europe (including Russia) was limited to a handful of transactions in Q1 2009, totalling €536m.

George Lewis, Head of Capital Markets for Jones Lang LaSalle Czech Republic, commented: “Jones Lang LaSalle was delighted to act on behalf of Deka for their acquisition of Jungmannova Plaza in Prague. This was one of the few transactions to take place in the first quarter of 2009 in CEE. Currently all the active investors are being highly selective in their investment requirements and taking their time over making decisions. We expect this to continue throughout 2009.”