With Europe appearing to have capped its many economic and financial crises, institutional real estate capital has been flooding back into Europe, coming in the form of direct investment and through various fund managers. Where are they coming from? From just about anywhere around the globe.
If there was a theme for commercial real estate in 2013, it was one of recovery. The global market grew by $549 billion (€400 billion), an increase of 18 percent on 2012. With risk-free assets a concept consigned to history — for now, at least — there is a tsunami of money looking for a relatively safe, preferably index-linked, home and Europe has been the beneficiary.
Technology has been a constant driver of change within the retail sector. However, it is the mass adoption of the Internet and the proliferation of smartphones and tablet devices that may drive the most fundamental evolution in the sector — a shift to virtual stores from those built of bricks and mortar.
Following Europe’s sovereign debt crisis, a swathe of smaller fund businesses were disbanded, consolidated or ruthlessly cut back. In 2013, though, we witnessed a complicity of positive trends transform the prospects for real estate funds in Europe.
With investment strategies and markets becoming increasingly globalised, the official launch of the Global Real Estate Fund Index in April comes at an opportune time for the non-listed real estate industry.
This year’s Visions, Insights & Perspectives – Europe conference took place in Copenhagen at the end of February. Just as the weather was much better than anyone had the right to expect in Copenhagen at the end of February, the conversation was much more optimistic than anyone had the right to expect among investors who are still finding their way out of the recession.
French property market activity continues to centre on Île-de-France. According to Cushman & Wakefield, the region around and including Paris represented €11.1 billion of transaction turnover in 2013.
The proportion of the €30.4 billion of 2013 German commercial real estate transaction activity accounted for by international investors fell last year to 33 percent, says Savills, from 46 percent in 2012.
Activity continued in the European unlisted property fund sector.
The past year has finally seen an upturn in the European economy, and few sectors have enjoyed it more than European logistics. Across Europe, investor turnover in the sector topped €14 billion for the year.
The Norwegian economy is gathering pace after a subdued 2013, as strong external demand drives business activity.
The European property market can be basically divided into two groups: London and everything else. In the fourth quarter of 2013, some €13.5 billion in transactions changed hands in London.