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Continued Rise in Greater China Investment into European Real Estate
Brief:Chinese investment in European real estate is likely to increase this year.
Despite increased domestic volatility and slower economic growth, Greater Chinese investment into European commercial real estate reached €8.5bn in 2015, a 22% increase on 2014 according to the latest research from a property agent . The report, which charts the trends in investment over the past three years, shows a series of changes which are set to continue throughout the remainder of 2016. One of the key themes is that Chinese investors have taken a broader approach and as a result have been active in wider range of property types and geographies.
 
Elsewhere, whereas activity in 2014 was dominated by sovereign and institutional capital, in 2015 private and listed companies grew their holdings alongside more corporate activity. Although offices dominated, there was also stronger investment into retail assets representing 17% of activity compared 6% in 2014. Other sectors, predominantly hospitality, represented a third of investment.
 
Nigel Almond, Head of Capital Markets Research at the property agent, said:" Geographically we have seen a clear change in strategy. The UK's share of investment slipped from over 80% to 56% in 2015. Whilst Lonodn dominated, marginally more capital flowed to the regions. The biggest swing has been investment moving increasingly towards the continent, representing 44% of investment compared 20% in 2014. France accounted for 27% of investment, mostly reflecting a significant corporate hospitality deal. We also saw money flow into Germany, Southern Europe and Benelux markets.”
 
Activity is expected to continue into 2016 from Chinese investors, with Chinese insurers, in particular, growing their overseas footprint. We expect Europe to share the spoils of approx. €70 billion of global spending power from Chinese insurers, with private companies also continuing to diversity away from home.
 
 

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