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Total direct real estate investment across Europe totalled €21.4bn in Q2 2010, an 11% increase on the €19.3bn recorded in Q1 2010, continuing the growth in the market since its low point in early 2009, reports global real estate advisor, DTZ, in its Q2 2010 European Investment Market Update, issued today.
Commenting on the figures, Magali Marton, Head of DTZ CEMEA Research said: “The recovery in volumes across Europe remains uneven. Over the quarter, of Europe’s major markets, the UK posted a 29% increase in volumes to €7.9bn, with France registering a 23% increase to €2.2bn. In contrast volumes in Germany slipped 19% to €3.8bn.”
Stuart Orr, Investment Director of Glasgow’s office said “Glasgow has always proved a popular UK regional city for European investors, particularly for the German Funds. This appetite remains strong, as shown by KanAm’s £51million acquisition of Broadway One, and by the number of overseas bids we received from our sale of 141 Bothwell Street. Attracted by the building quality and the relative yield discount compared to the London market, we are aware of a number of European investors keen to invest but waiting for the right opportunity”.
Private property vehicles, including third party fund managers remained the dominant buyers over the quarter, with purchases totalling €10.1bn. Institutional investors were increasingly active with €2.9bn of purchases, while listed property companies accounted for a further €2.5bn of acquisitions.
Activity from inter-regional investors increased this quarter, accounting for 19% of acquisitions. Only Asian and Middle Eastern investors were net buyers over the quarter at €1.5 and €1.1bn respectively, reflective of a number of high profiles deals over the period. In contrast European investors were the net sellers by €1.6bn, primarily driven by UK investors who sold a net €1.5bn predominantly in the UK.
Magali Marton concluded: “Uncertainty over the recovery in Europe’s economies poses a downside risk to the recovery. This combined with planned legislative changes to German Open Ended Funds, means that we have seen a reduction in net flows to open ended funds which could hold back significant new investment in the short term. On a more positive note however, overall demand remains strong and the weakness of the Pound and the Euro against the dollar make Europe’s real estate markets attractive to overseas investors, with investment flows from the Middle East and Asia likely to persist.”
For further information, please contact:
Stuart Orr Laura Atherton
Investment Director Press Office
Email: stuart.orr@dtz.com Email: laura.atherton@dtz.com
Tel: +44 (0) 141 304 3280 Tel: +44 (0) 141 304 3280 | 