International investors pushed transaction volumes and liquidity levels in Europe to a new post-crisis record in 2013, according to DTZ’s Money into Property report released on Thursday.
International investors pushed transaction volumes and liquidity levels in Europe to a new post-crisis record in 2013, according to DTZ’s Money into Property report released on Thursday.
Capital flows from outside Europe (inter-regional investors) represented a record 27% of investment in 2013. This is above the global average of 15% and higher than the shares recorded for Asia Pacific (8%) and the US (7%). Globally, cross-border investment represented a post-crisis record share of 23% of total volumes.
Cross-border investors (both inter-regional and intra-regional) accounted for more than 40% of all transactions in Europe last year, compared with only 20% for Asia and the US, according to the research. ‘This means that Europe is by far the most attractive market for cross-border investors based on this activity,’ Magali Marton, head of CEMEA research at DTZ, said during a webcast on the report on Thursday.
The UK was the most liquid market globally in 2013 with a liquidity ratio of 9.2%, followed by Singapore at 7.6%. This compares with a global average of 4%, up from 3.4% in 2012.
London cemented its position as the leading global city for investment, with overseas capital accounting for 54% of total volumes in 2013. Investment by inter-regional investors in Central London was close to $18 bn in 2013, three times the level seen in Manhattan ($6 bn). Paris and Frankfurt underperformed the average ratio for city liquidity, while Prague and Warsaw outperformed it.
Although global transaction volumes have not yet moved back to the peak levels of 2007 when $800 bn (€591 bn) was invested, activity has continued to grow since the low point in 2009, reaching $518 bn in 2013, DTZ found. This means transaction volumes are now close to 2006 levels, ‘not a bad place to be in,’ said Marton.
While all regions recorded double-digit growth last year, Europe chalked up the strongest improvement with a 26% increase in volumes to $185 bn.
The upward trend in pricing levels seen across all regions in recent years faltered in Continental Europe during the course of 2013, reflecting declines in the French and Dutch markets, Marton said. By contrast, the UK continued its upward march into Q1 2014 as the strong recovery in the market spread beyond London to other parts of the UK.
Click on the attachment below for the full DTZ Money into Property 2014 report