Reuters / March 5th, 2015
Reuters reports: According to a report by from global commercial real estate data and analytics firm Real Capital Analytics (RCA), Europe saw $241.7 billion of commercial real estate transactions in 2014, a rise of 13 percent year-over-year.
“Political and economic uncertainty in France deterred investors in 2012 and 2013, leaving assets in Paris attractively priced relative to the other core investment markets of western Europe,” said Tom Leahy, RCA’s Director of Market Analysis EMEA. Higher pricing in popular European cities like London and Munich led to a fall in overall investment, with many investors pursuing second-tier market opportunities. Ireland and Spain investment volumes improved.
The new modified rules on tax-exempt real estate investment trusts (REITs) combined with private equity funds filling the vacuum left by banks generated a new competition for assets. Domestic investments made up around 53 percent of purchases by value last year based on RCA data, with global investors reaching 2007 business levels RCA also noted that a 48 percent by volume drop occurred in Russian transactions, while investment from China fell 27 percent, with the United States now as the primary cross-border capital target.
“Prospects for the market look good in 2015 following the European Central Bank’s January decision to pump hundreds of billions of stimulus money into the region’s economy,” said Simon Mallinson, RCA’s Executive Managing Director, EMEA & APAC. Mallinson continued, “Quantitative easing will lower interest rates for an extended period of time to support real estate investment in the Euro Zone, while the weaker Euro may attract more international investors to buy assets,” he said.