Mideast investors drive Europe real estate market
Dubai, August 28, 2013
Middle East and North American investors are the major drivers of increased activity in the European commercial real estate market, said a report.
Buyers from outside the region now account for more than a quarter of all transactions in the first half of 2013, said the latest data by CBRE, a global real estate consulting firm.
Investors from the Middle East increased investment activity, accounting for 9 per cent of the entire market and 21 per cent of cross-border transactions during the period, it said.
Capital from the region is generally institutional in nature, with nearly half of the total coming from its sovereign wealth funds. Transactions from Middle Eastern buyers show a strong bias towards London (nearly 50 per cent of the total) and offices, although there were several large retail properties among the purchases made, it said.
“London remains the destination of choice for foreign investors due to its solid growth potential and its status as a global financial hub, alongside its stable political environment and a transparent legal system, which are key for international and regional buyers alike,” said Nick Maclean, managing director, CBRE Middle East.
Buyers from North America accounted for a steadily increasing share of the market (13 per cent of the entire market and 24 per cent of cross-border transactions) in H1.
The total value of commercial real estate investment activity in Europe continued to grow in Q2 at 6 per cent higher than the total for Q1, said the report.
The €32.6 billion ($43.6 billion) recorded over the quarter showed a 22 per cent increase on the same quarter last year and is the highest Q2 total since 2007 (before the financial crisis), it said.
The level of cross-border investment in Europe continues to increase, with foreign buyers accounting for 44 per cent of all transactions in H1 (by value) compared to 40 per cent in the second half of 2012.
A significant change has developed in the sources of cross-border real estate investment, with intra-European investment accounting for just 16 per cent of transactions in H1. This percentage had been holding steady at around 20 per cent of the market throughout 2011 and 2012.
Jonathan Hull, head of EMEA Capital Markets, CBRE, 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.” - TradeArabia News Service