Immigration Life in the UK: The recently released report, "Capital Views—The Attractiveness of Europe," indicates that driven by increased supply in property investment, restructuring of real estate businesses, rising prices, and quantitative easing policies, the European real estate market will firmly capture the attention of global investors. It is expected that the European real estate market will experience a period of high activity over the next two years, with its relative pricing being highly attractive.
The report points out that investment activity in the real estate market is rapidly spreading across Europe, from the center and south of Europe, and is now developing toward Central Europe. However, global monetary activity is relatively lagging, still closely following the largest central markets. For example, over the past year, the UK, Germany, and France absorbed three-quarters of the global capital in the European market.
This situation is changing as Southern Europe enters the vision of global investors. For instance, Spain is currently the only country other than the UK to attract global capital. This change will accelerate in 2015 as global investors turn their attention to more emerging markets in Europe.
Experts state that with bank deleveraging, shifts in real estate portfolios, and the return of development activities, the overall options available to investors are continuously increasing. "In a stable economic environment, the increase in choices will continue to support investment activities from both domestic and foreign buyers, and the market may reach a new high, surpassing last year's record of 275 billion euros."
The report notes that the liquidity of the European market, the increasing number of tenants, and attractive prices all indicate higher-than-average returns. Core markets such as London, Paris, and Germany will continue to lead; investment focus is on leading cities in smaller countries, notably Madrid, Barcelona, Milan, and Brussels; and the investment focus is shifting eastward, not only to major centers in Poland but also to the Czech Republic.
Europe has been a preferred choice for the global market during this period. Although risk aversion has eased and, from a macro perspective, other markets—particularly the United States—are more attractive, Europe possesses unique advantages and continues to be a focal point. Quantitative easing policies have further increased Europe's advantages; macro-driven demand is stronger and has begun to narrow the gap between tenants and capital cycles. The market is likely to see two years of high activity and attractive relative prices.
The structure of investors entering the European market will become more globalized, and it is expected that transaction volumes in the European market will reach a new high this year. However, to achieve this goal, frankly speaking, demand is easier to satisfy than supply—market supply is the key to determining whether the forecast is correct. In fact, the supply stock in the European market is a key reason for Europe's attraction of global capital and is also an important factor in determining the specific flow of funds after they enter.
