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Ressurection Of European Real Estate

News Posted On: 01 August 2012

Investment in commercial property in Europe experienced a major increase from the period between April and June, after having fallen in the past couple of months due to the sovereign debt crisis that is currently ongoing.

The latest surveys on capital markets conducted by Jones Lang La Salle suggest that the volumes of investment have increased by 17 per cent from the past quarter. About 40 per cent of these investments have been made by foreign investors. Foreign investment was all the more prominent in countries such as Russia and France, where 75 per cent of investment in real estate was accounted for by foreigners. However, three of the biggest deals across the border were in the capital of England.

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The report showed that the volumes of investment in the South of Europe remained low-key, and that investors from abroad continually based their focus on a select range of locations and assets. The report also shows that $108 billion was invested worldwide in the second quarter, which is a significant increase of 24 per cent compared to the first quarter, but flat when compared with the second quarter of 2011.

The most noteworthy increase in volumes on a quarterly basis was recorded in the Americas, where the investment figures rose to $47 billion following a 33 per cent rise. The only geographic area to have recorded a yearly growth was Asia Pacific, with $26 billion invested last quarter as compared to the $20 billion investment in the second quarter of 2011 as Singapore, Hong Kong, China and Australia all recorded increases in trading activities.

London: The leader in investment volumes?

The surprise package was London, perhaps, as it was the city that recorded incredible investment volumes of $8.7 billion in the second quarter. Paris followed in second place with an investment total of $4.7 billion while New York was in at third with $4.3 billion.

The European Capital Markets Research Head of Jones Lang La Salle Robert Stassen said that lot sizes of real estate in London fall in brackets that can attract big money. He said that investors were looking at the various aspects from which they could benefit by investing in property in the capital city. The benefits include one of the finest education systems, great transport links, a firm and secure government and a central time zone. Stassen believes that the market has the potential to see an increase in interest in the acquisition of property outside London as well, if it gets better than it already is in the second half of 2012.

Jones Lang La Salle has predicted the continual growth of investment volumes in the last six month of 2012. The predictions are based on the assumption that investors will make deals with real assets so as to record better yields. Investors from Canada, the United States and the Middle East have increased their activities in the real estate market, and an increase is also expected from Asian borders such as Thailand, Indonesia and China says David Green-Morgan, the Research Director of Global Capital Markets at Jones Lang La Salle.

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