In 2014, U.S. institutions increased their commercial investment in Europe by 75%.
According to CBRE, price changes in the United States, along with stronger prospects abroad, have driven US-based investors to expand their commercial real estate acquisitions in Europe by 75% year over year.
The United Kingdom and Germany are two of the most popular investment markets in the United States. properties for sale
Despite higher investment volumes in domestic markets, U.S. investors dramatically boosted their activity in Europe in H1 2014, with $15.5 billion (€11 billion) in acquisitions, up from more than $8 billion (€6.3 billion) in H1 2013. The United Kingdom (36%) received the majority of this investment, with Germany (23%) and France (17%) also being popular choices. The United States invested roughly $0.75 billion (€0.5 billion) in Ireland and Italy.
The increase in buying activity from American investors was the most significant shift in buyer nationality in Europe, accounting for 63 percent of cross-regional investment in the region. The transition to positive net investment from US investors was also remarkable. In recent years, sales have almost equaled acquisitions; nevertheless, acquisitions surpassed sales by around $6 billion (€4.5 billion) in the first half of 2014.
CBRE Capital Markets Global President Chris Ludeman stated, “While the volume of business in commercial real estate in the United States is increasing, price movements in domestic markets and improving prospects in the European economy have prompted U.S. investors to target Europe more aggressively than in recent years. This investment is dominated by fund managers, rather than investors buying directly, so they do represent a conduit to some extent. Nonetheless, the improvement in recent quarters has been impressive.”
“Another aspect is the diversity of locales that U.S. investors are looking for, with general pricing in Europe considered as appealing and’recovery play’ assets being more available than in the United States.”
In the first half of 2014, US-based investors targeted a variety of European regions, with properties acquired in at least 15 European countries. The city that garnered the most investment from the United States was Paris, which received more than $2.5 billion (€1.9 billion).
In H1 2014, there was also an increase in “recovery play” investment. Overseas purchasers have been the key driver of investment growth in Ireland, where the vast majority of transactions took place in Dublin, with U.S. capital contributing the most. Investors like as Blackstone, Hines, Kennedy Wilson, and Lone Star all made major purchases in Dublin in the first half of 2014, attracted by the city’s economic recovery narrative and excellent returns that are competitive with many other European capitals. In the first half of 2014, US investors accounted for 43% of all investment volume in Dublin.
Investors from the United States have also boosted their involvement in the Netherlands, a market in which they have traditionally been underrepresented. These purchases were made around the country, but included some major purchases in Amsterdam, the country’s largest commercial center.