China has made some high-profile acquisitions but US investors remain the dominant force in continental Europe, panellists agreed at the PropertyEU Global Capital Flows Briefing, which was held in London this week.
‘The US remains the deepest pool of capital and our business continues to be dominated by US appetite for European assets,’ said Jason Oram, partner, head of Southern Europe at Europa Capital. ‘On a pan-European scale, the US is still the number one investor.’
US interest in Europe has increased because the continent is now seen as a relatively safe bet, as political risk is perceived to be receding and the economy is back on track. Europe’s attractiveness shines by comparison with the threat from North Korea in Asia and the uncertainties over the Trump administration in the US.
‘US capital is always looking for the safest place to invest in the world, and now it is looking at continental Europe, which looks a lot safer by comparison,’ said Will Rowson, partner, Hodes & Weill Associates. ‘It will be interesting to see how much of that US capital is pushed to the edges of Europe.’
Another crucial requirement for US investors is a liquid market which can guarantee a quick exit when needed. That is why they like Germany, despite the difficulties of competing with domestic investors, said Rowson: ‘It is a tough market but it always provides an easy exit for foreign investors. Investing in a strong domestic market is important when the tide goes out.’
A positive sign of how much stronger European markets have become is the fact that US investors are now willing to move to Central and Eastern European countries because they are confident that those markets now have enough depth.
‘There is a definite move Eastwards, as US investors want opportunities and a wider investing base,’ said David Ryland, partner at Paul Hastings Europe. ‘Places like Croatia and the Central and Eastern European countries are attracting a lot of interest, because the market has become more mature and there a lot more exits to local investors. Add the good economic fundamentals and you see that those countries tick a lot of boxes for investors.’
