Rise in Cross-Regional Real Estate Investment Activity

There has been an increase in the number of non-European buyers making an investment in the continent's property markets. According to the latest data published by CBRE...

There has been an increase in the number of non-European buyers making an investment in the continent's property markets. According to the latest data published by CBRE, investors from outside Europe accounted for one-quarter of total investment volumes in the three months from April to June this year. The firm stated this is the highest proportion that has been recorded since the second quarter of 2007, before the onset of the financial crisis.

Head of Europe, the Middle East and Africa (EMEA) capital markets at the company Jonathan Hull stated: "Non-European real estate investors are currently dominating the markets in which they are active. All of the ten largest transactions in London in H1 2012 went to foreign investors, with nine of those deals from outside Europe." The UK continues to be the main target for buyers in this demographic, with 62 per cent of the funding from this group flowing into the nation. France and Germany, meanwhile, attracted 27 per cent of the investment from outside the continent.

CBRE noted this demonstrates a "strong bias in favour of safe-haven destinations". Although North American investors are among the most active in the EMEA region, an increasing number of financiers from Asia, the Middle East and Latin America have been acquiring assets in Europe. Mr Hull added this is having an impact on the value of commercial property in the continent. "Cross-regional investors now have a significant influence on pricing in the European market, particularly for the prime product that is in demand," he asserted.

Earlier this year, international investment director at BNP Paribas Real Estate Andrew Cruickshank stated that western European commercial property markets are expected to see a slowdown in investment volumes by the end of this year, despite putting in a strong performance during the first half of 2012. He explained factors such as poor economic growth, the continuing uncertainty over how the eurozone crisis will be resolved and a weaker outlook for occupier markets are all contributing to make investors more nervous about putting their money into the continent's real estate sector.
 

- Wednesday 05 September 2012

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