European cross border property business flourishes

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EUROPE- Europe is the preferred location of global cross-border investment activity in real estate, according to international property adviser DTZ, which predicts continued growth in the sector over the next five years.

In terms of commercial property markets currently invested in by those with international portfolios, European countries dominate the top five destinations, with the UK rising from fifth place to first over the past year. France, Germany, Italy and Spain closely follow.

“The outlook for the UK economy is still amongst the best in Europe. The investor favourable UK lease structures and continuing poor performance of the equities markets across Europe combine to make a compelling argument for investment in good UK property,” says Nick West, director at DTZ.

According to the annual survey conducted by DTZ, 64% of respondents plan to raise their overseas investments in the next three to five years. The survey also show increasing investor interest in Asia Pacific, particularly from North Americans – around 90% have portfolios in Asia Pacific compare to just 15% of Europeans – although this figure is expected to double over the next five years.

Says Peter Collins, group head of DTZ: “In the short term, cross-border real estate investment flows will be influenced by fluctuations in stock market performance, the strength of the world economy and changes in saving patterns which will affect the purchasing power of global investment funds.

“In the medium to long term there are likely to be improvements in information flows and in the depth and breadth of property market research. These factors, combined with new developments in vehicles for cross-border property investment, should boost investment to real estate, both domestic and cross-border, ensuring that the trend towards globalisation of the property market continues.”

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