Credit crunch, but no credit crisis, says DTZ

While the current credit crunch has produced a slight downturn on the real estate markets, it is not comparable to the long term downturn seen in 1979 and 1983, said Joe Valente, speaking to PropertyEU at EXPO REAL in Munich. 'The other extreme is that we see investors sitting around doing nothing for three months and then it’s back to business as usual. And that's alos wrong. The big difference this time is that we’ll three to six months of uncertainty, and moving forward it will be a case of steady as she goes,' he said.

Transaction costs will increase and that will have an impact on both levels of turnover and pricing, he added. 'Investment transactions in Europe are currently at around EUR 53 bn, compared with 20-25 bn just five years ago. So we’ve been very successful in placing capital in the market. And don't forget, cross-border transaction now account for around 50% of all investment activity, so there’s no shortage of deals.'

Valente also believes Europe will attract a fair amount of capital from Asia, specifically China an India, in the near future. 'We predicted a while back that Chinese capital would begin flowing into Europe, once the floodgates open, and that's exactly what's happening now. Just a few weeks after Chinese legislation changed, we saw them buy 30-40% of Blackstone, and they're now being seen in deal in London, New York, Singapore and elsewhere,' Valente said.

Something else just beyond the horizon is Indian capital, Valente believes. 'There is an immense amount of wealth in India, and it's only now being seen on the world’s capital markets.'