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Globalising investment in real estate: bringing Asian investors in the European market

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BNP Paribas Real Estate is focused on facilitating cross-border transactions in the European real estate market. As Larry Young, Head of BNP Paribas Real Estate’s International Investment Group explains, “we want to facilitate cross-border capital flow, and ensure our international clients find suitable opportunities in Europe”.

Why are European assets an attractive opportunity for Asian investors?

Asian investors are now looking to diverisfy their real estate portfolio and are interested in the European market. Europe is a mature market characterised by transparency and having a reliable legal environment. Supported by strong economic power and a unique economic zone, Europe is proving attractive to well-established foreign investors Furthermore, Asian investors are already present in the market competing for either large platform opportunities or core assets. At BNP Paribas Real Estate, we understand this trend and growing need, and we are consistently working to help investors, and respond to the needs of the market.

Asian investors are interested in the European real estate market thanks to growing confidence in the economic situation. Despite the fact that the competition is high, they are intent on diversifying their portfolios with European assets. It’s also interesting to see that Asian investors usually prefer to start investing in the UK. Even if Brexit has had an impact within Europe, the UK remains the top choice for Asian capital into the European Real Estate market. Once investors acquire knowledge and expertise within the European Real Estate market, Asian investors usually expand their capital into Germany and France.

In 2017, cross border investment from Asian and Pacific investors reached €26.4bn, an increase of 95% from 2016. The countries that particularly attracted these investors were the UK (€14.7bn), Germany (€5.6bn), Finland (€1.5 bn) and Poland (€1.1bn).

The importance of a strong global investment network for BNP Paribas Real Estate

Supporting Asian investments in Europe is very important to BNP Paribas Real Estate. It means diversifying our portfolio, expanding our client list, but most importantly it helps us to become a major player in the global real estate industry. Therefore, to support this activity, we have a team in Europe dedicated to international investors. We also have offices for our International Investment Group in Hong Kong and Singapore, to guide investors and inform them on opportunities worldwide.

Investing in Italy

Economic activity in Italy was strong at the end of 2017, with growth totalling 1.5% which has continued into 2018 (+1.4%).

During Q1 2018, investment in Italy has mainly been made in the Retail sector with €741 million (50% of the total investment for Italy). The Retail sector is therefore showing growth when compared with the long-term average.

In terms of foreign investment in Italy, the first quarter of 2018 saw an increase in the share of volumes invested by foreign investors. Total European capital flows invested in Italy within the first quarter of 2018, represented €735 million. Both the Retail and Logistics sector were dominated by foreign investors while the Hotel sector was taken up by domestic investors.

Read the full Investment in Italy report here

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