Non-European investors tilt “balance of power” in Europe property

Office buildings1Non-European commercial property investors are pushing out from the UK and into other parts of Europe and last year helped drive investment to its highest level seen. The UK’s share of non-European real estate investment slipped from 53% in 2013 to 44% in 2015, with Germany the main beneficiary – though Ireland, Spain and Italy also saw an increase. Research shows that European commercial real estate investment from all sources totaled €264 billion in 2015, a greater sum than in any previous year. The previous peak was €230 billion in 2007, according to Cushman & Wakefield, a property services firm. Compared to 2014, non-European investors increased their investment in European real estate by 32% to €76 billion and made fewer sales of property than investors based in Europe. Nigel Almond, director of research at Cushman & Wakefield, said: “Whilst the volume of non-European investment continues to grow across all markets, the balance of power is now shifting away from the UK and London. “With many non-European investors having established their presence in the UK, they are now pushing out with more vigour into the continent. Peripheral markets – Ireland, Spain and Italy – attracted a further 10%.” The UK attracted the largest flows for all sources in total, in line with previous trends, but Germany, Italy, Spain and Portugal also saw a surge in funding for real estate projects as investors diversified portfolios. Year-on-year increases in investment levels from all sources, not just non-Europeans, in some of the major markets last year were:
  • Germany €53 billion, up 41%
  • Italy €8 billion, up 67%
  • Spain €11 billion, up 36%
However, Central and Eastern Europe saw just a 6% rise to €6.8 billion in 2015, although the region, and Poland in particular, experienced a strong final quarter. ©2016 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.