Although investment volumes are down across the region, Germany has seen its largest volumes since 2007. German buyers are very active in their home market totalling 49 per cent of all transactions. However, Colliers is seeing international buyers target the large transactions, including Blackstone buying former WestLB HQ in Dusseldorf for €350 million and Morgan Stanley buying a portfolio of four shopping centres in East Germany for approximately €400 million.
The Report highlights that the appetite for safe-haven markets, led by London and Paris, continued unabated to attract the bulk of cross-border capital. Safe Havens remain the preferred target of Sovereign Wealth Funds (SWF’s) and global insurance companies seeking stable and secured incomes.
Richard Divall, Head of Cross Border Capital Markets, EMEA explained: “For the moment, London is the top preference for Asian investors, particularly new entrants, with City offices most en vogue. Chinese insurance companies, now allowed to invest outside their country, represent another source of fresh money rapidly making its way into European property, with London as the chief port of entry. A well-known Chinese insurance company is said to be looking to spend approximately £800 million in London’s Canary Wharf and in one of its first ventures in the London property market, a Taiwanese Insurance Company is rumoured to be in talks to spend 400m on an office in the City.”
“We are seeing some Malaysian and Chinese capital starting to increase their appetite for risk and look at shopping centres in UK with strong local partners. The trend here is for Asian investors to investing, alongside strong local partners, in larger lot sizes.”
Partly reflecting growing competition from non-EU buyers, the Report shows that European institutions in Q1 continued to feature more prominently in less “crowded” markets within Europe’s core: notable recent deals saw DEKA buying a prime office property in Amsterdam (Symphony) and DEKA also involved in an SLB office deal in Helsinki.
Divall concluded, “Signalling a shift in dynamics, Colliers is seeing Private Equity funds increasingly taking country-risk believing the likes of Spain and Italy have now bottomed out and will get better. It’s telling that North American buyers, led by equity funds, increased their acquisitions by 353 per cent across the peripherals (Portugal, Italy, Ireland, Greece and Spain) last year.”
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