EMEA Investor Intentions Survey 2015

Earlier in the year, leading real estate consultants CBRE published the results of an extensive survey of the EMEA (Europe, Middle East and Africa) property investment community. While the responders were primarily from the real estate sector, parallels could be drawn across a wider range of asset classes.

The responses provided useful insight to investor intentions for the year and beyond – we’d thought it would be interesting to re-visit the survey and get a feel for how intentions have, or have not, become reality.

What did the survey say?

Key points included were that:

  • Western Europe would be the favoured region for European investors with some 52% of respondents putting the area in their top spot.
  • Most attractive countries for investment were the United Kingdom (31%), Germany (15%) and Spain 15%.
  • Those actively pursuing investment in “alternative” sectors included Real Estate Debt (32%), Student Living (27%) and Healthcare (17%).
  • Buying/Selling activity in 2015 against 2014 were both expected to show an increase as 58% forecast higher buying and 46% higher selling activity.

How has 2015 been so far? Have the forecasts been reflected in real deals?

As forecast, European real estate has been very much in favour in 2015 as the region’s economy overall seems to have avoided much of the sluggishness witnessed in the Far East and the US. While US and China are experiencing barely-positive and lowest-level since early 2009 respectively, Europe is showing a stronger outlook with year-end forecasts within a 2 – 3% GDP range.*

Commercial Real Estate in Europe reached EUR54.8 billion during Q1, an increase of 31% year-on-year. Spain (as expected) was a popular venue for activity with almost EUR3 billion in deals completing in the quarter – some 153% up y-o-y.*

In offices, the UK (again as expected) has seen robust increases in demand particularly in Central London with a 25% hike in Q1 take-up over the long term first quarter average. Overall European office vacancy rates have continued their downward trend.*

Logistics and Retail have both seen buoyant activity with a 50% hike in lettings take-up and a 94% y-o-y investment volumes increase respectively. *

In Residential, overall European residential investment volumes reached EUR11.1 billion during Q1, an increase of 187% y-o-y. This included the mammoth 144,000 unit disposal by Luxembourg-based GAGFAH to Germany’s Deutsche Annington group.* (*AEW Q2 2015)

The Alternatives sector was forecast to receive extra attention in 2015 and this has also been borne out by activity to date. Following the global financial crisis, some EUR233 billion of non-core real estate exposure is still held by European asset management agencies. **

Real Estate Debt was forecast to be a hotspot for investor attention in 2015 and that again appears to be the case. Deals that include CRE loans and REO sales that completed in H1 2015 totalled EUR23.5 billion – just short of the total volume seen in the whole of 2012.** (**C & W Corporate Finance).

Student housing has again been a popular choice for alternative investor money as the UK sector alone saw GBP4 billion invested by institutional and sovereign investors at the half-year stage (CBRE).

It’s the enduring fundamentals of low rent defaults, growing numbers of students and a perennial shortage of good quality, purpose-built accommodation that have spurred demand to record levels. Institutional investors seeking access to scale have provided some fierce bidding and that shows little sign of slowing.

Healthcare is another sector that was projected to receive attention in 2015 but some big names are also looking at the sector with some interest. Alphabet Inc (the holding corporation for household names such as Google) is reportedly seeking to unlock significant value from its healthcare sector investments. (Cowan & Co, Sept 2015)

The UK alone has seen almost USD2.7 billion in equity financing for the healthcare investment sector so far this year (The Tablet June 2015) while there is no shortage of institutional investor demand – the real estate deal total is in excess of GBP463 million in the first six months of 2015. (CBRE).


Generally, the survey seems to have hit the nail on the head quite comprehensively with its forecasts being reflected in the deals and performance we have seen so far. The respondents were real estate investors generally, but a number of asset classes could have shown comparable results if not for the recent slowdown in global stocks. This has been predominantly triggered by concerns over the Chinese economy has overshadowed equities generally but real estate is still an attractive option across most sectors with those noted above continuing to attract most attention.



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