Pan-European property investment funds have been investing strongly in a number of key national markets over the last two years, albeit at levels considerably below those seen in the late 2000s, new research from IPD shows.
Pan-European property investment funds have been investing strongly in a number of key national markets over the last two years, albeit at levels considerably below those seen in the late 2000s, new research from IPD shows.
Through 2011, the lion's share of net investment by pan-European funds was allocated to the UK, Germany and Central and Eastern Europe. These three locations accounted for EUR 961 mln out of the total EUR 1.2 bn of net investment that such funds undertook during the year.
This pattern of investment by pan-European funds in large part reflected the perceived risk profiles of national markets in the context of ongoing Eurozone difficulties. Germany emerged through 2011 as by far the strongest financial and economic power within the Eurozone while the UK gained from its independent currency and the status of London as a safe haven in the eyes of many investors.
France, in contrast, saw a falling away of investment demand through the year, despite being the country with the largest asset allocation amongst these pan-European funds, with around one-third of the total value of EUR 11.2 bn at the end of 2011.
Investment levels for these funds have gradually revived over the last three years as confidence in the European markets has been rebuilding. In 2010 and 2011 net investment of just over EUR 1 bn in each year was well up on the EUR 562 mln recorded for 2009, but was still nowhere near the heady levels of 2007 and 2008, when a peak annual investment of almost EUR 4 bn was achieved.
