UK remains Europe`s most liquid market in 2014

DTZ Research
DTZ INSIGHT
UK remains Europe’s
most liquid market in 2014
European Liquidity
European liquidity above ten year average
Figure 1
Liquidity indicates the ease with which investors can enter and
exit a market. We measure liquidity by measuring transaction
volumes relative to each market’s commercial property stock.
The resulting ratio allows for a like-for-like comparison of
markets.
Most and least liquid markets, 2014
UK
Sweden
Finland
Most liquid
Germany
The last few years have seen a significant uplift in liquidity
across the region. Having fallen to a low of 2.1% in 2009, the
ratio has picked up to 5.6% in 2014, ahead of the ten year
average of 4.6%.
Luxemb.
Europe
Italy
Estonia
UK remains on pole, Sweden second
The UK remained Europe’s most liquid market in 2014 as
11.3% of its stock was transacted (Figure 1). Sweden moved
up to second from third in 2013 as trading represented 9.4% of
its stock with another Nordic market, Finland, third at 7.7% and
Germany fourth at 7.2%. France, which attracts the thirdlargest trading volume in absolute terms, saw just 4% of its
th
stock traded and is ranked 11 across Europe.
Least liquid
Denmark
Ukraine
Russia
0%
2%
4%
6%
8%
10%
12%
Source: DTZ Research
Table 1
Russia and Ukraine sit at the bottom of the table as investors
have withdrawn from these markets as a result of the ongoing
political uncertainty. Both Denmark and Italy have struggled to
recover as lack of liquidity in the lending markets continues to
stifle activity. Denmark is the only Nordic market outside the
top 10.
2014
Country
2014
Rank
ratio
2013
rank
1
UK
11.3%
1
2
Sweden
9.4%
3
3
Finland
7.7%
10
Finland and Ireland move up the ranks
4
Germany
7.2%
4
Over the past year we have seen a number of markets move
up the rankings (Table 1). Finland was the most eye-catching
as it rose from 10th spot in 2013 to third in 2014, supported by
a rapid increase in sales of industrial and warehouse space.
The peripheral markets also rose up the tables with Ireland up
from 14th to 7th and Spain from 19th to 14th as volumes in
both these markets rose. In contrast Italy dropped back from
17th to 19th spot as liquidity remained flat.
5
Luxembourg
6.8%
9
6
Poland
6.7%
2
7
Ireland
6.5%
14
8
Belgium
6.1%
7
9
Czech Republic
6.0%
11
10
Norway
5.8%
5
Source: DTZ Research
Author
Author
Contact
Kasia Sielewicz
Capital Markets Research
+44 (0)20 3296 2322
[email protected]
Nigel Almond
Head of Capital Markets Research
+44 (0)20 3296 2328
[email protected]
Magali Marton
Head of EMEA Research
+33(0)1 4964 4954
[email protected]
www.dtz.com
DTZ Insight
1
UK remains cross border capital of Europe
Figure 2
Non-European investment into Europe reached a record 30%
share of total activity in 2014 and record volume at EUR56bn.
This pushed non-European liquidity to a record 1.7%.
Liquidity by source of capital, 2014
Not surprisingly the UK was the most liquid market for nonEuropean investors at 4.4% (Figure 2), driven by strong inflows
from North American, Asian and globally-sourced capital, and
most focused on Central London. For the last six years the UK
has been the top market for non-European liquidity.
Despite relatively low absolute volumes of EUR3bn in 2014,
Poland was the next most liquid market for non-European
activity at 3.7% as non-European volumes represented 55% of
total activity. Ireland was third at 2.6% and the Czech Republic
in fourth spot at 2.2%. Despite a relatively high share of noEuropean activity in the Netherlands and Spain, overall liquidity
was below the European average. Only Norway sits in the top
10 for Nordic markets, highlighting the dominance of domestic
and European investors in these markets.
Sweden most liquid market over long run
Despite being the most liquid market in the last two years, the
UK is only the second most liquid over the last 10 years, with
Sweden taking top spot. Over the last ten years liquidity has
averaged 9% in Sweden, well ahead of the UK at 7.4% (Figure
3). Despite having an invested stock one-fifth the size of the
UK, it sees relatively higher levels of trading.
Of the other major markets, Germany sits in fourth spot with
liquidity averaging 6.5% over the last ten years. Despite being
much smaller in terms of their size, Luxembourg, Poland and
the Czech Republic remain some of the most liquid markets in
Europe. Again the Nordic markets of Norway and Finland also
sit in the top 10.
EMEA
EMEA
John Forrester
Paul Boursican
Head of EMEA International
investment
+44 (0)20 3296 2019
[email protected]
Chief Executive
+44 (0)20 3296 2002
[email protected]
5%
60%
4%
40%
3%
2%
20%
1%
0%
0%
Non-European
Non-European as % of total
Source: DTZ Research
Figure 3
Most liquid markets, ten year average
Sweden
UK
Luxembourg
Germany
Poland
Czech Rep.
Norway
Belgium
Europe
Russia
Finland
0%
2%
4%
6%
8%
10%
Source: DTZ Research
Disclaimer
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qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no
responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this
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DTZ Insight
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