EUROPE - European investors are retreating to their home regions and targeting multiple sectors to diversify their portfolios, according to the most recent Great wall of money report from DTZ.

DTZ reported capital available for direct investment in property had reached $329bn (€235bn) - a 17% increase on last year.

Of that, $104bn - a 45% increase from the middle of last year - comes from funds targeting Asia-Pacific markets.

Interest in Asia Pacific, mainly from US investors, could lead to faster than expected repricing in those markets.

The report also noted a 14% increase to $111bn for investment in the Americas.

In contrast, US$114bn is available for deployment in European markets - a mere 2% increase, reflecting significant repricing already underway in the UK and other markets.

The report found that European and Asian investors were more likely to focus on their home markets and regions. 

More than 80% of European capital is targeting its home region.

However, the majority of investors are targeting multiple property types.

Almost 80% target more than one property type, reflecting "the overwhelming preference of investors to have flexibility in how they deploy capital across property types", according to the report. 

Alternative property types, including healthcare and leisure, have grown their share of capital, and hotels have taken over both industrial and residential as the third most invested sector.

More than half of the capital identified (56%) comes from third-party managed funds, with listed companies representing a further 20% of the capital raised. Both these groups continue to target multiple property types.

Institutions, including pension funds, accounted for 13% of the total, with German open-ended funds' share of capital falling below 1%.

DTZ said: "We would expect activity to remain relatively subdued at a time when inflows currently remain low."

According to DTZ, real estate overall has become slightly less attractive to investors since 2009.

If the downward trend continues, it anticipates stabilisation in the volumes of new capital raised.

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