According to analysis by Savills, EMEA attracts more inward investment from overseas capital than any other global market. EMEA real estate markets received $183bn (€168bn) of capital funding in total in 2015, 63% of which originated from overseas.
The EMEA has proved significantly more attractive to international investors than other markets, with cross border capital now responsible for eight of every 18 real estate transactions in the region. North America was the biggest source of investment, spending $75bn (€69bn) in EMEA in 2015, compared to domestic and Asian investors who invested $68bn (€62bn) and $24bn (€22bn) respectively.
Rasheed Hassan, head of cross border investment at Savills, comments: “For core buyers, there are a number of capital cities and gateway cities across EMEA such as London, Paris and the five big German cities, all of which offer an abundance of Grade A real estate with secure income steams. For more opportunistic buyers, in particular American funds, there are still distressed / value-add opportunities throughout EMEA in locations such as Spain, Greece and Italy. In addition, mainland Europe is behind the US and UK in its recovery following the GFC, which is providing NPL (non-performing loan) and large portfolio deals.”
Savills notes that we are also now seeing additional flow from a number of investment houses in North America that traditionally concentrated on the value-add market, but have now raised new funds with a lower cost of capital and, as a result, are also looking at core assets throughout EMEA.
The firm highlights that North American investors in general tend to be more highly leveraged, with average loan to values of 64%, compared to Asian buyers at 53% and those from EMEA at 59%.
