INVESTORS from outside of Europe spent a record €36bn (£30bn) on European real estate last year, with US, Asian and Middle Eastern investors leading the charge.
According to research released today by DTZ at Mipim, the property’s industry annual conference in Cannes, this represented a 26 per cent share of total volumes invested across the world last year by overseas buyers.
However, in absolute terms this still below the €46bn invested at the peak of the market in 2007. The property consultancy firm predicts that investment into Europe will increase over the next two years, taking total volumes to 2007 levels and the overall share to 30 per cent.
“Over the last five years we have seen a significant increase in investment from a growing number of Asian and Middle Eastern funds. Close to €9bn was invested by Asian sources in 2013, with Singaporean and Chinese capital most dominant, accounting for 47 per cent of Asian funds,” Nigel Almond, head of strategy research at DTZ said.
Kuwait and the UAE represented 66 per cent of the near €6bn invested by Middle East buyers.
“With limited sales, investors from both these regions have been significant net buyers over the last five years, more so than the North American and global funds,” Almond added.
North American and global fund managers were among the biggest investors in 2013, each splurging over €7bn each. But they were also the biggest sellers, offloading €9bn each.
Office schemes are the biggest focus of investment, representing two thirds of spending by non-European investors last year. However DTZ said there is increasing focus on residential led schemes, especially from Asia.
In a separate report published today, DTZ estimates that the amount of new money being raised and investing in the global property market grew by four per cent to a record $354bn in the second hald of last year.
At seven per cent, Europe saw the biggest increase in capital, followed by a six per cent rise in Asia Pacific.
3 THINGS TO WATCH OUT FOR AT MIPIM 2014
MORE than 20,500 developers, investors and other property professionals will descend on Cannes today for the 25th anniversary of Mipim, the world’s largest property conference.
Read our at-a-glance guide for some of the week’s top events by day – and the best receptions and parties by night.
1 London Mayor Boris Johnson (right) will give his keynote speech this afternoon, in which he is likely to make his case for London as the city with the best real estate investment opportunities for overseas investors.
2 Major London investors and developers will gather to discuss the outlook for the central London property market at a lunch hosted by property agents Levy and analysts IPD. Among the guests attending are The Crown Estate’s head of investment Paul Clark, Quintain director Nigel Kempner and Simon Quayle, executive director at West End landlord Shaftesbury.
3 The British Property Federation will co-host a roundtable breakfast on Thursday with law firm Addleshaw Goddard and Xing Yan, the managing director of the Beijing Engineering Construction Group (BECG), on encouraging overseas investment in the UK outside of London. The Chinese developer, which is behind the £800m redevelopment of Manchester’s Airport City scheme, wants to persuade more of its compatriots to invest in the north of england. British Land chief executive Chris Grigg (left) is also set to attend.
... AND THE PARTIES AT WHICH TO BE SEEN
LLOYDS Banking Group is hosting a reception this evening in a sign that the good times have finally returned, with banks confident to announce their presence at the event for the first time since 2008, when the financial crisis made the champagne-fuelled week a more sombre affair.
Property agents Cushman & Wakefield will host their usual party on
Wednesday lunchtime followed by rival Savills’ cocktail event in the evening.
Partners at law firm Lovells will bring along their instruments to play in the big band that accompanies their annual boat party, while fund managers Pramerica are also hosting a party this week.
Tom Bloxham, (left), chairman of Urban Splash, is also expected to host his annual MIPIM wind-down party on Friday, at his house in the hills behind Cannes.