LONDON, Feb 29 (Reuters) - U.S. and Canadian property investors will do more deals in Europe this year than their Far Eastern and Middle Eastern counterparts, capitalising on North America’s relative economic strength, property consultancy CBRE said.
North American investors accounted for 30 percent of the total number of cross-border deals in Europe last year, up from 21 percent in 2010. It was the largest slice ahead of 13 percent of deals from ‘other European countries’ and the trend will continue this year, said Jonathan Hull, EMEA head of capital markets at CBRE.
Larger U.S. deals included Morgan Stanley’s purchase of the Galleria Shopping Centre in St Petersburg, Russia, for about 840 million euros ($1.1 billion).
“North America is moving into recovery more quickly,” said Hull. “They are experienced players in the property market and I would expect them to be the biggest cross-border investors in Europe again in 2012.”
U.S. investors spent 9 billion euros while Canadian buyers accounted for 2 billion euros. Total domestic and cross-border investment in European property was 118 billion euros in 2011 versus a figure of 239 billion in 2006 at the height of the property boom.
There have been better than expected U.S. economic data so far this year in relation to jobs and construction activity and a commitment by the Federal Reserve to keep interest rates low.
U.S. private equity giants Blackstone, Lone Star and Carlyle are stepping up their search for bargains in Europe’s ravaged commercial property market, where lending has been slashed and banks face growing pressure to offload bad real estate assets and debt.
Separately, Boston Properties, the property firm run by Mort Zuckerman, the publisher and proprietor of the New York Daily News, is reportedly close to making its London debut with the 285-million-pound purchase of the Drapers Gardens office block in London’s financial district.
Canadian pension funds, which escaped the worst of the global credit crisis, are investing more overseas because they own much of the best domestic real estate. The property arm of the Ontario Municipal Employees Retirement System is developing the London skyscraper known as the Cheesegrater with British Land.