London has long been the darling of European property investment for many foreign buyers, but CBRE reports that the top spot has been overtaken by Paris as a result of weakening interest in other locations due to the Eurozone financial crisis. Russia is also gaining in interest, supplanting Berlin for the sixth slot on the list of most desired locations. Nordic cities and various areas in Germany are also attracting more attention thanks to their comparatively more responsible financial management and stability. Even so, the supremacy of London and Paris give credence to the benefits of being historically popular. For more on this continue reading the following article from Property Wire.
Paris has overtaken London to become the number one city in Europe for property investment while Moscow has overtaken Berlin as the number six city, according to global property adviser CBRE.
With the onset of the financial crisis in the third quarter of 2008 foreign investors largely abandoned Russia and have not yet returned in significant numbers. Domestic investors account for the majority of commercial real estate investment in Russia.
But according to Christopher Peters, director of research at CBRE in Russia once foreign investors recover their appetite for Russia her place in this table will rise further.
The Russian real estate investment market as a whole recorded €1.684 billion of activity in the fourth quarter of 2011. Together with the second quarter of 2011 with investment of €1.790 billion, these were the highest quarterly volumes seen in real estate investment since before the onset of the financial crisis.
A surge in investment activity in the final quarter of 2011 meant that investment in Paris jumped from €3.6 billion in the first half of the year to €7.9 billion in the second half, resulting in the first change in the top two of the rankings since CBRE began compiling the list in 2004.
But investment in central London in the second half of 2011 was far from subdued at €7.8 billion. Although failing to match the very high total recorded in the second half of 2010.
The French real estate investment market as a whole recorded €6.5 billion of activity in the final quarter of 2011. This was the highest quarterly turnover for France since the third quarter of 2007 and was ahead of every other market in Europe during the final quarter of 2011 except the UK, which saw an estimated €8.3 billion of investment activity.
Investment activity in France was heavily biased towards the Paris office sector and included large portfolio and single asset deals.
‘Investor sentiment in Europe has been heavily influenced by the sovereign credit rating downgrades and the lack of a solution to the Eurozone crisis. This has driven European investment activity towards the Nordic markets and German cities in particular,’ said Jonathan Hull, EMEA head of capital markets at CBRE.
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