European real estate was a prime beneficiary of North American and Asian capital last year, but macroeconomic concerns such as renewed uncertainty about the eurozone and fears of deflation could slow the flow over the next 12 months, according to JLL's Arthur de Haast.
European real estate was a prime beneficiary of North American and Asian capital last year, but macroeconomic concerns such as renewed uncertainty about the eurozone and fears of deflation could slow the flow over the next 12 months, according to JLL's Arthur de Haast.
De Haast, head of the International Capital Group at JLL, was commenting during an with PropertyEU on the release of JLL's preliminary volume data on 2014 and forecast for 2015.
JLL's research indicates that global transaction volumes reached $700 bn (€593 bn) last year, up 18% on 2013. For 2015 JLL anticipates further growth of somewhere between 4-7% to €730-750 bn.
EUROPE
European volumes rose 21% to $267 bn in 2014. 'If we look back at 2014 Europe was the primary beneficiary of a lot of global capital flows from North American and Asia,' De Haast said. 'We think renewed uncertainty around the eurozone with Greece's possible exit back on the agenda, plus concerns about deflation and low growth, might slow the volume of offshore capital coming into Europe a bit.
'That capital has to go somewhere, so we think North America may be a beneficiary to some degree. Some of the North American capital may stay in its domestic market rather than come to Europe as we have seen recently.'
HOT MARKETS
De Haast said the UK was a very attractive market for offshore investors in 2014 and this should continue to be the case in 2015. 'Clearly, the outcome of the [general] election in 2015 is a concern to many international investors now, so I think that will hold things back perhaps in the first half of the year. Depending on the outcome of the election, we hope we will see a strong finish to 2015.'
Germany, he added, continued to be an attractive market because of its steady performance in 2014.
Southern Europe saw a surge in investment activity which JLL believes should continue into this year. De Haast cautioned that a renegotiation by Greece of its position within the eurozone, or possibly even an exit, would 'impact' on the bounceback for property in the region. On the other hand, such a scenario would help bring the Nordics, the Benelux and other European markets to the attention of international investors during 2015.
to watch the interview with JLL's Arthur de Haast.
