#MIPIM Europe benefits most from increased Asian investment

Asian investors deployed a total of $40 bn (€38 bn) into international commercial real estate in 2014, a rise of 23% year on year, CBRE has reported.

As Asian investors increase their exposure to global real estate, they are diversifying their geographic and sector footprint. 2013 saw transactions centred on global gateway cities, predominantly in the office sector.

EMEA remains by some way the biggest centre for Asian outbound investment, attracting $13.7 bn (34%) of capital from the region in 2014. Overall, EMEA accounted for 50% more Asian investment than the Americas.

In 2014, while London remained the preferred destination and offices the asset class of choice, a greater range of asset types and cities were invested in. Throughout the year investors looked to the next tier of cities, including locations such as Paris, Los Angeles, San Francisco and Washington. This is also demonstrated by the news that the first direct investment by an Asian institution in Dutch real estate has completed with Singaporean institution First Sponsor Group, acquiring Zuiderhof 1.

Asian investment in Germany increased markedly from €746 mln in 2013 to €1.8 bn in 2014. Spain and Italy also saw substantial investments from Asian buyers. In Spain €494 mln was spent versus nothing in 2013 and Italy saw €426 mln after just €3.8 mln in the prior year.

At a sector level globally, hotels were the biggest beneficiary of Asian investors looking beyond office markets, capturing 16% of total international spend vs 11% in 2013. In Europe, they invested ten times more capital year over year in the sector – €1 bn in 2014 versus €102 million in 2013.

Across the board investor activity grew, with Singapore becoming the largest source of Asian capital, followed by China and Hong Kong. Taiwanese and Chinese insurers in particular grew their international real estate investment activities, by 770% and 310% respectively in the year.

Jonathan Hull, head of EMEA Capital Markets, CBRE, commented: 'Asian investors are hugely attracted to the European market and particularly its gateway cities. The trends we saw in 2014 represent an expected progression in their investment strategies – which has seen an expansion of their footprint into new cities and sectors as they become more confident in the market. We expect this trend to continue in Europe this year, as we have already seen in Holland with First Sponsor Group’s recent acquisition of the Zuiderhof 1 office building.'

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