Institutional investors boost European real estate allocationsㅈ

28 8월, 23:53www.ftseglobalmarkets.com

 

Institutional investors boost European real estate allocations Spending on European commercial property has returned to pre-financial crisis levels this year, according to CBRE Group. The firm says institutional investors invested more in absolute terms in the first half of 2013 when compared to the first six months of 2007.http://www.ftseglobalmarkets.com/

 

 Spending on European commercial property has returned to pre-financial crisis levels this year, according to CBRE Group. The firm says institutional investors invested more in absolute terms in the first half of 2013 when compared to the first six months of 2007.

 

 Overall, the total value of second quarter commercial real estate investment activity in Europe reached €32.6bn, meaning a 22% increase on the same quarter last year and is the highest Q2 total in six years.

 

 Jonathan Hull, head of EMEA Capital Markets, says: “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."

 

 CBRE says North American and Middle East investors are the major drivers of increased activity in the European commercial real estate market, with buyers from outside Europe now accounting for more than a quarter of all transactions in the first half of 2013.

 

 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 bn 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.

 

 H1 2013 also saw a significant share of large transactions, with 134 of €100m 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 (€100m plus) transactions. At the low point in market activity (H1 2009), when commercial real estate transactions totalling just €26.5bn were completed in the first of the year, these large transactions accounted for 28% of the total.

 

 Hull adds: "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."