German and French investors real estate investors already ahead of last year's investment volume
According to recent RCA figures analysed by Savills, German and French investors are on track to allocate more capital to real estate than last year in a number of European countries.
The international real estate adviser notes that the absence of some competitive investors from outside of Europe has allowed European investors to fill the space.
Between January and September 2020, German investors have invested more than EUR1.4 billion into Spanish commercial property, an increase of 77 per cent on last year’s total volume (EUR800 million). During the same period of time, over EUR1.89 billion was invested into the UK (compared to EUR1.9 billion for the whole of 2019) and over EUR850 million into Italian real estate (79% of last year’s total of EUR1 billion), so could well surpass both in the final quarter of the year.
Similarly, French investors have already allocated EUR2.45 billion to German and EUR326m to Irish real estate, compared to EUR2.54 billion and EUR338m in 2019, respectively. This investor group is also on track to acquire more in the United Kingdom and Italy by the end of the year, having invested EUR1.1 billion into the former and EUR1.5 billion into the latter already (compared to EUR1.2 billion for the UK and EUR1.69 billion for Italy in 2019).
Eri Mitsostergiou, Director European Research at Savills, says: “Two things stand out for me from this data. Firstly, European real estate continues to be seen as a safe investment in times of Covid-19, in particular core offices, prime logistics and multifamily assets due to stable and long-term returns. Secondly, while they continue to invest into their home markets, both German and French investors have been diversifying their portfolio which is why their allocation to many other European countries is on the rise.”
Marcus Lemli, CEO Savills Germany and Head of Investment Europe, says: “In challenging times, it’s normal to go to markets you’re familiar with, which is why we’re seeing so much German and French capital looking at domestic and neighbouring markets again. Furthermore, the notable rise in European investor activity led by these two groups is a result of the money pouring into pension funds that needs to be reallocated in order to generate returns, with real estate benefitting.”