Foreign investment eases with less Asian and Middle Eastern activity
The European commercial property investment market reached €101.7bn in H1 2019, representing a 13% decline compared to H1 2018 result, which is the all-time high. The foreign investment share of this total reached €50bn, which is 10% lower than in 2018. Despite a drop in absolute volumes, the share of total investment taken by cross-border buying increased marginally to reach 49%.
The first half of 2019 saw an increase in cross border investment undertaken by Europe based buyers (+4%). Its share grew to reach 45% of total foreign investment. European investors targeted a variety of assets: Allianz purchased a €405m logistics portfolio in Sweden, Savills IM acquired a portfolio of outlets in France for €300m while Warburg-HIH & Hana AM bought an office building in Amsterdam for €256m.
Americans retreated in 2016 after unprecedented highs recorded in 2015, and are only now slowly coming back to the European market. American investment increased 2% in the H1 2019 with almost €12bn invested. The biggest transaction made with American money was 25 Canada Square in London, purchased by Citigroup for €1.3bn.
Asia & Pacific investment decreased again (-11%), but it still represents 15% of the total. South Koreans showed strong interest for the French market, notably with the acquisition of the Lumière office building in Paris by Primonial and Samsung or the CBX tower in La Défense purchased for €450m.
Compared to a very active 2018, H1 2019 saw a decrease in Middle Eastern investment which remains well below the long-term average. Some notable office deals were Priory Court / Lewis building in Birmingham purchased by Gulf Islamic Investments for €160m and 12 Stewart Street in London acquired by AI Rashed & Sons Group for €111m.