Le mie ricette per la real estate communityNorth American and Middle East investors are the major drivers of
increased activity in the European commercial real estate market and buyers from outside the region
now account for more than a quarter of all transactions in H1 2013, according to the latest data from
CBRE.
The total value of commercial real estate investment activity in Europe continued to grow in Q2 2013
at 6% higher than the total for Q1 2013. The €32.6 billion recorded over the quarter shows a 22%
increase on the same quarter last year and is the highest Q2 total since 2007 (before the financial
crisis).
The level of cross-border investment in Europe continues to increase, both in absolute terms and as
a proportion of the market as a whole. Over the first half of 2013, foreign buyers accounted for 44%
of all transactions (by value) compared to 40% in the second half of 2012.
A significant change has developed in the sources of cross-border real estate investment, with intra-
European investment (where the buyer is from another European country) accounting for just 16% of
transactions in H1 2013. This percentage had been holding steady at around 20% of the market
throughout 2011 and 2012.
Investment capital from outside Europe is becoming increasingly important to the market and now
accounts for 28% of all transactions in H1 2013 (from 19% in H2 2012). Even within this group of
non-European investors there has been a marked change in the sources of capital.
Buyers from North America accounted for a steadily increasing share of the market (13% of the
entire market and 24% of cross-border transactions in H1 2013). This could have a significant effect
on the dynamics of the property market as US investors – which make up the vast majority of activity
– typically look at a more diverse range of markets.
Investors from the Middle East also increased investment activity (9% of the entire market and 21%
of cross-border transactions in H1 2013). Capital from the Middle East is generally institutional in
nature, with nearly half of the total coming from the region’s sovereign wealth funds. Transactions
from Middle Eastern buyers show a strong bias towards London (nearly 50% of the total) and offices,
although there were several large retail properties among the purchases made.
Within Europe, German investors remain the largest group of cross-border buyers; the open-ended
funds continuing to be active buyers around Europe with acquisitions totaling well over €1 billion in
H1 2013. The German ‘Spezial’ funds are also active, but their acquisitions have been strongly
focused on Germany in the first half of this year.
The long-term trends in buyer mix that have been evolving since the financial crisis have continued
into 2013. Most notable of these is the growth in direct institutional investment in real estate, which
has increased steadily over the last six years from 9% in 2007 to 26% of the total in H1 2013. An
increase in activity by sovereign wealth funds has been responsible for some of this investment, but
both pension funds and insurance companies are far more active than was the case before the
financial crisis.
Jonathan Hull, Head of EMEA Capital Markets, CBRE, commented:
“The institutional groups invested more in absolute terms in H1 2013 than in H1 2007, just prior to
the financial crisis, despite the fact that investment market turnover in H1 2007 was nearly twice that
recorded in the last six months. Coupled with the growth in lending activity by institutions, this
illustrates the substantial increase in real estate allocation by institutional investors.”
H1 2013 also saw a significant share of large transactions, with 134 of €100 million or more recorded
over the period, between them accounting for 47% of the total turnover of the market. It is a feature
of the market recovery that as total investment activity has increased so too has the proportion that
has been made up of large (€100 million plus) transactions. At the low point in market activity (H1
2009), when commercial real estate transactions totaling just €26.5 billion were completed in the first
of the year, these large transactions accounted for 28% of the total.
Jonathan Hull added:
“The increase in the proportion of the market comprised by large transactions coincides with an
increase in the amount of non-European capital flowing into the market. It has long been the case
that buyers from outside the region are focused on larger than average assets and H1 2013 was no
exception.”
Source : Company