Capital flows into European real estate have held up in the third quarter of 2014 after an exceptionally strong second quarter, according to Simon Mallinson, managing director of Real Capital Analytics.
Capital flows into European real estate have held up in the third quarter of 2014 after an exceptionally strong second quarter, according to Simon Mallinson, managing director of Real Capital Analytics.
‘We still have to tally the figures, but transaction volumes for Q3 are looking really positive,’ he said.
‘We had an amazingly buoyant final quarter in 2013, and then it went a bit flat in Q1 this year. But Q2 was the strongest quarter on record since 2007. That was a real surprise. There used to be a lull around the summer months, but it’s now starting to look as if there’s deal activity in Europe all the year round.’
Mallinson attributed the sustained level of transaction activity to the high volumes of Asian and US capital coming into Europe. Sovereign wealth capital has soared in the past years as a percentage of of global cross-border flows. While the figure was no more than 3% in 2007, in 2013, it had climbed to 13%, he noted. 'It has slowed down a little bit and is now at around 8%. But in the year to date, 42% of that capital has gone to London, which is six times more than the figure San Francisco (or 7%). Manhattan on the other hand is attracting just a bit less than London. I'm amazed at how London continues to bring in cross-border capital.'