Foreign Property News | Posted by Zarni Kyaw
Asian investors, including those from mainland China and Hong Kong, are increasingly shifting their attention to continental Europe as an investment destination, according to analysts. Low interest rates in the Eurozone, and what some say is an ongoing recovery in the economy have bolstered investor interest in the region.
The trend is also partly driven by aversion to risks associated with the Brexit impasse in the UK.
In recent times the UK property market has received the largest share of foreign investment in Europe.
“Investors are focused on the positives in European markets – debt costs are very low as the European Central Bank (ECB) has held interest rates at very low levels,” said Liam Bailey, partner and global head of research at Knight Frank.
Last month, the Frankfurt-based ECB kept its key interest rates unchanged, with the marginal lending rate at 0.25 per cent, the main refinancing rate at 0 per cent.
“The European markets took a long time to recover after the financial crisis and investors have seen a value opportunity by investing in these markets at this stage of the cycle,” Bailey said, adding that Knight Frank sees positive prospects for cities such as Paris, Berlin, Lisbon and Madrid.
Xavier Hunter, head of real estate practise at law firm Linklaters in Hong Kong, said Asian investors are showing increasing interest in central Europe and other non-traditional areas for investment.
In 2017, investment from China, Hong Kong and other Asian sources into continental Europe totalled US$21.45 billion, nearly three times the US$7.55 billion the previous year, data from Real Capital Analytics showed.
In 2018, investment from Asia totalled US$12.5 billion.
Still, the figure was 66 per cent higher than 2016.
In the first quarter of this year, Asian investors were behind US$925.27 million worth of real estate investment in continental Europe.
Ref: Property Report
