Pricing levels are increasingly attracting North American investors to European real estate, according to advisor Savills, which anticipates that North American investors will again be the largest investor group in Europe by the end of the year.
In 2022, North Americans invested more than Europeans cross border, €48 bn compared to €36.6bn, which is 31% above the five-year average for the former.
Looking to Asia, given the typical flexibility of Singaporean investors, Savills expects continued deployment across various sectors and geographies in Europe during the course of 2023. Singapore is increasingly viewed as the hub for economic activity in the region and as such acts as a funnel for outbound capital flows from other Asia Pacific jurisdictions.
‘We foresee a diverse range of cross border investors being attracted to European real estate during the course of 2023. Much of this will be opportunity-led, with investors engaging on processes where there is a discernible pricing adjustment,’ said James Burke, director, European Capital Markets & Global Cross Border Investment at Savills. ‘Investors with less appetite for risk should focus on strategies targeting income-driven assets in the most appealing locations and sectors in Europe. These should be chosen based on long-term trends, thereby offering greater stability and resilience to market fluctuations.’
All in all, Savills expects investment activity to remain subdued in Europe until the second half of the year when the economy is expected to slowly start to pick up.
'We anticipate total European real estate investment volumes for 2023 to range between €230 bn and €240 bn, a decrease of 17%-20% yoy,’ said Lydia Brissy, director, European Research at Savills.
