Two very large investment transactions in France and Germany recently helped confirm their status - along with the UK - as perceived safe havens for cross-border real estate investors in an otherwise turbulent European landscape.
Two very large investment transactions in France and Germany recently helped confirm their status - along with the UK - as perceived safe havens for cross-border real estate investors in an otherwise turbulent European landscape.
French REIT Foncière des Murs teamed up with institutional investors Crédit Agricole Assurances and Assurances du Crédit Mutuel this month to acquire a portfolio of 165 B&B hotels in France for EUR 508 mln. In October, Norway's giant oil-fuelled pension fund entered the German market with a EUR 784 mln office-retail transaction in partnership with AXA REIM.
The French deal involved budget hotels, while Norges and AXA's joint venture was for prime buildings. The common denominator was that the deals took place in two of the 'Big Three' core western European countries that investors have until now been betting on almost to the exclusion of weaker European markets.
Recent economic data can be interpreted as supporting this view or as a warning that the two markets are losing some of their ‘safe haven’ appeal.
Preliminary figures indicate France's economy unexpectedly grew 0.2% in the third quarter despite the country's high unemployment rate and concerns about the competitiveness of its business sector. Market watchers remain sceptical though whether the French economy will grow further with the jobless rate at the highest level in over a decade and EUR 30 bn of tax hikes to come into effect in 2013.
Data released by the German federal statistics office Destatis indicates that the German economy, like its large Gallic neighbour, grew by 0.2% between July and end-September compared to the previous quarter. While such a result was welcomed in France, the data indicates Germany - Europe's largest and most resilient economy - is feeling the effects of the wider eurozone crisis.
The question of how this should influence the strategies of cross-border real estate investors in 2013 will be one of the themes addressed in PropertyEU's Outlook 2013 series of investment briefings. The special morning briefings are being held in London (20 November), Paris (22 November) and Frankfurt (27 November).
Click on the link below for more information and to register for the Outlook 2013 briefings.
