Global investors are at their most active in Europe, says RCA

International investors bought the most commercial property in Europe by value since the start of the global financial crisis in the 12 months to the end of the third quarter, analysis by research firm Real Capital Analytics (RCA) shows.

Non-European investors purchased €57.4 bn of commercial real estate located in the region during the 12 months to end-September, according to data compiled by RCA. This represented 28% of all transactions registered during the period and was the largest flow of investment from 'global' investors since 2007, when they made €61.6 bn of property acquisitions.

In the third quarter alone, global capital accounted for 31% of all transactions in Europe, the highest proportion in seven years of RCA data tracking this investment theme.

'Global investors have been at their most acquisitive in Europe’s property markets since the financial crisis as state-backed investors snap up big-ticket prime assets or portfolios and private equity funds, mainly from North America, deploy the large amounts of capital that they have raised for opportunistic Investments,' commented Simon Mallinson, RCA’s managing director for EMEA. 'We expect the global money flow theme into Europe to continue in 2015.'

The weight of global capital targeting Europe helped lift overall transaction volumes by 21% in the 12 months ended September 30 to €204.6 bn. A total of €44.4 bn of transactions was registered in July through September, a 5% increase on the year-earlier period, RCA data shows.

Blackstone was the most active of the global investors, making €4.2 bn of investments in the 12 months through September 30. Notable transactions included its purchase in July of 125 Old Broad Street in the financial district of London for about €400 mln and a string of logistics warehouse purchases that included a portfolio of assets in France and Germany acquired in June from Foncière des Régions for €473 mln.

Kuwait Investment Authority’s €2.05 bn purchase of the More London estate in the British capital made it the largest investor among non-European sovereign wealth funds during the period, while Qatar Investment Authority was next placed with purchases that included its 20% interest in the Canary Wharf Tower in London’s Docklands.

RCA’s Mallinson commented: 'London has been the destination of choice for sovereign wealth funds, attracting 52% of investment in the past three years and leaving Paris trailing into a distant second place.'