US, Canadian property investors return to Europe in year of two halves

GLOBAL - Investors from the US and Canada drove European commercial real estate transaction volumes up by 7% from 2010 to €118bn last year, with a surge in acquisition activity in second half, according to CBRE data.

The report, which does not include acquisitions of European real estate loan portfolios, disclosed that the two North American groups combined accounted for 30% of European acquisitions, compared with 21% the previous year.

US investors invested €9bn in European commercial, compared with €2bn invested by their Canadian counterparts.

North American investors sold assets worth €8bn in the same period.

However, the report also noted a significant drop in the number of above-€500m deals closed during the year, which it attributed to an impact of economic uncertainty.

Only four major deals closed in the second half, compared with nine transacted in the first quarter.

Central London accounted for 18% of acquisitions by North American investors, although last year also saw a doubling of total investment in Central and Eastern European (CEE) markets.

Shopping centres accounted for 43% of investment in CEE markets.

Despite the upswing in US activity noted by CBRE, European investors were responsible for the majority of cross-border activity.

German investors were the most active in their home region, at 12%, although this figure represents half the transactions completed the previous year.

The report's authors said the shortfall reflected the retrenchment of German open-ended funds to their domestic market.

In separate news, private equity firm MGPA has acquired an 11-asset mixed portfolio in western Germany for an unnamed institutional investor.

The firm did not disclose the price of the acquisition, which comprises three community centres, a retail park anchored by German food retailers, a hypermarket and six warehouses.

The deal reflects the firm's current focus on German logistics.

In a written response to questions, MGPA European chief executive Laurent Luccioni attributed the return of US investors to European real estate to market "normalisation".