EUROPE - Cross-border commercial property investment in Europe fell to 45% of the total activity in 2008, according to the latest research by CB Richard Ellis.

The decrease in the number of large investment deals, usually carried out by international investors, and the overall decline in investment activity across Europe in the second half of the year meant cross-border buyers represented less than one-third of total real estate activity in Europe's main markets last year, including the UK, Germany and France.

"Although individual markets experienced varying changes to cross-border investment levels, there was an overall decline in international buying activity in Europe last year," said Michael Haddock, director of EMEA Research and Consulting at CBRE.

"This reflected changes to average deal size, the availability of debt and the general downsizing of the European market, among other things," he added.

American buyers, in particular, were much less active, investing less than €8bn in 2008 compared to €35bn in 2007.

Another pattern change during 2008 was the majority of cross-border buyers were from within the local regions, and of all cross-border investors, 28% were from outside the region compared to 41% in 2007.

In some countries, however, cross-border activity made up the majority of investments as the Eastern European region, for instance, recorded 85% of its real estate deals as cross-border activity, while Spain recorded 69% and Belgium 66%.

In Spain, the significant price falls and large sales by Banco Santander and the supermarket chain Eroski to foreign investors contributed to cross-border activity.

German, American and British investors remained the top three buyers in European markets, purchasing over €25bn of property between them.

German investors were the most active, investing around €10bn in other foreign markets, with German open-ended funds carrying out 70% of those purchases.

Haddock remains confident that cross-border investment activity will increase as the markets start recovering.

 "In the current downturn, markets are re-pricing at different rates and will therefore represent buying opportunities for flexible international investors at different times in the future," he said.

CBRE also appointed Robert Sulentic, currently the firm's chief executive of development services, as chief financial officer (CFO) to replace Gil Borok, who was named interim CFO in 2008.

Borok will resume his role as the company's executive vice president and accounting officer and will become CFO of the Americas business.

Sultenic, who previously worked as CFO and CEO of Trammell Crow Company before it was taken over by CBRE in December 2006, will continue to head the development services business.

In addition, CBRE has appointed Jim Groch as chief investment officer in a newly-created role which includes managing the firm's balance sheet and monitoring merger and acquisition activities. Groch held a similar position with Trammel Crow Company.

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