1 cbre | european capital markets and investor intentions 2014
TRANSCRIPT
1 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
2 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
Dr Peter DamesickChairman EMEA Research
12 March 2014
3 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
2007 2008 2009 2010 2011 2012 20130
50
100
150
200
250
300
350
400
450
500
Americas
EMEA
Asia Pacific
GLOBAL COMMERCIAL REAL ESTATE INVESTMENT
$ billion
Source: CBRE Research, RCA; * All commercial real estate and hotels
Change 2013 vs 2012
Americas +16.5%
EMEA +34.3%
Asia Pacific +28.0%
4 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
2010 2011 2012 2013 -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
0%
5%
10%
15%
20%
25%
30%
South America
North America
Middle East
Australia
Asia
Africa
% European Market
€ billion
Source: CBRE Research
CROSS-REGIONAL GLOBAL CAPITAL BOOSTS EUROPEAN REAL ESTATE INVESTMENT
0
5 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
GLOBAL REAL ESTATE INVESTMENT IN EUROPEMarket distribution, % total purchases
London Paris Germany UK Regions Rest of Europe0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
20122013
Source: CBRE Research
6 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
€ billion
CROSS-REGIONAL GLOBAL CAPITAL FLOWS IN EUROPE2013 by Market
Asia Mid-East North America -
5,000
10,000
15,000
20,000
25,000
Europe Other
UK Other
Germany
Paris (IDF)
London
Source: CBRE Research
0
7 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
20
04
.Q1
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.Q3
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.Q1
20
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.Q3
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20
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.Q3
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.Q1
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.Q1
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.Q3
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.Q1
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.Q3 -
5,000
10,000
15,000
20,000
25,000
Rest of UK
Central London
Source: Property Data, CBRE Research
£ billion
COMMERCIAL REAL ESTATE INVESTMENT IN UK£53 billion transacted in 2013 – £21 billion in just Q4
0
8 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
20
07
.Q1
20
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.Q40
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
5,000
10,000
15,000
20,000
25,000
Ireland
Portugal
Spain
Italy
Rolling 12 month
€ million
COMMERCIAL PROPERTY INVESTMENT IN EURO PERIPHERY Ireland, Spain, Portugal, Italy
Source: CBRE Research
9 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
EUROPE’S FASTEST GROWING INVESTMENT MARKETS IN 2013Cities with biggest relative increases in sales 2013 vs 2012
Rome
Brussels
Geneva
Barcelona
Helsinki
Dusseldorf
Prague
Dublin
Milan
Madrid
0% 50% 100% 150% 200% 250%
Source: CBRE Research
INVESTOR INTENTIONS SURVEY RESULTS 2014
11 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
SURVEY RESPONDENTS BY TYPE OF ORGANISATION
43%
14%
11%
11%
10%
6%5%
Fund/ asset managerPrivate property companyPension fund/ insurance company/ sovereign wealthListed property company/ REITPrivate equity firm/ venture capitalBankOther
Source: CBRE European Investor Intentions Survey 2014
12 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
WHICH GLOBAL REGION IS MOST PREFERRED FOR INVESTMENT?
0%
10%
20%
30%
40%
50%
60%
70%
80%
2013
2014
Source: CBRE European Investor Intentions Survey 2014
13 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
INVESTING OUTSIDE EUROPE IN 2014?
Yes, more than in 2013
Yes, same amount as in 2013
Yes, less than in 2013
No
0% 10% 20% 30% 40% 50% 60% 70%
Source: CBRE European Investor Intentions Survey 2014
14 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
Source: CBRE European Investor Intentions Survey 2014
INVESTMENT OUTSIDE EUROPE ON 2014: WHICH REGIONS?Percentage of respondents who will invest outside Europe
Emerging Asia
24%
Pacific
21%78%
North America
South America
17%
Africa Middle East
Developed Asia
52% 5% 4%
* Respondents could choose more than one region
15 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
Source: CBRE Asia Pacific Investor Intentions Survey 2014
ASIA PACIFIC INVESTORS: WHERE WILL THEY INVEST GLOBALLY IN 2014?Percentage of respondents who will invest outside Asia Pacific
Central and Eastern Europe
23%68%
Western Europe South America
8%
North America
57%
Africa
2%
Middle East
2%
* Respondents could choose more than one region
16 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
MOST ATTRACTIVE COUNTRY IN EUROPE FOR INVESTMENT PURCHASES
UK Germany Spain Poland Nether-lands
France Italy Nordics Other CEE Other 0%
5%
10%
15%
20%
25%
30%
35%
40%
2013
2014
Source: CBRE European Investor Intentions Survey 2014
17 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
Barcelona
Hamburg
Warsaw
Dubllin
Amsterdam
Paris
Munich
Berlin
Madrid
London
0% 5% 10% 15% 20% 25% 30% 35%
20142013
Dublin
Rise in attractiveness
of Spanish cities
MOST ATTRACTIVE CITY FOR INVESTMENT PURCHASES
Source: CBRE European Investor Intentions Survey 2014
18 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
Other
Retail Warehouses
Hotels
Light Industrial
Retail High St
Residential
Shopping Centres
Logistics
Office
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
20142013
MOST PREFERRED SECTOR FOR INVESTMENT PURCHASES
Source: CBRE European Investor Intentions Survey 2014
Stronger preference
19 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
TOP 3 ‘MOST ATTRACTIVE’ FOR PURCHASES IN 2014
Countries Cities Sectors
Source: CBRE European Investor Intentions Survey 2014
1. UK 29%
2. Germany 21%
3. Spain 19%
1. London 30%
2. Madrid 14%
3. Berlin 9%
1. Offices 39%
2. Logistics 16%
3. Shopping centres 11%
20 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
MOST PREFERRED ASSET TYPE FOR PURCHASES
Source: CBRE European Investor Intentions Survey 2014
Prime or core assets Good secondary Opportunistic / value-added
Distressed assets0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2013
2014
21 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
RISK APPETITE FOR SECONDARY ASSETS IN 2014 COMPARED WITH LAST YEAR
Source: CBRE European Investor Intentions Survey 2014
Much higher Higher Same Lower Much lower0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%49%
22 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
MOST PREFERRED ASSET TYPE FOR PURCHASESPercent of investors by global region, 2014
Source: CBRE Investor Intentions Survey 2014
Prime or core assets Good secondary Opportunistic / value-added Distressed assets0
10
20
30
40
50
60
Asia PacificNorth AmericaEurope
23 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
INVESTMENT AND INTEREST IN ALTERNATIVE SECTORS
Source: CBRE European Investor Intentions Survey 2014
Self Storage
Automotive/Car Parks
Retirement living
Infrastructure
Healthcare
Leisure
Student Living
0% 5% 10% 15% 20% 25% 30% 35% 40%
Invested
Actively interested
24 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
EXPECTED PURCHASING ACTIVITY THIS YEAR COMPARED WITH LAST YEAR
More than 20% higher
Between 10%- 20%
higher
Up to 10% higher
About the same
Up to 10% lower
Between 10% - 20% lower
More than 20% lower
0%
5%
10%
15%
20%
25%
30%
35%
40%
2013
2014
Source: CBRE European Investor Intentions Survey 2014
67% of respondents said purchasing activity would be higher in 2014
25 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
WHAT IS THE BIGGEST OBSTACLE TO ACQUIRING ASSETS IN EUROPE?
Low market transparency
Transaction costs/time to complete
Lack of investment partners
Cost/availability of debt
Competition from other investors
Asset pricing
Availability of assets
0% 5% 10% 15% 20% 25% 30% 35% 40%
Source: CBRE European Investor Intentions Survey 2014
82% of investors
cited these 3obstacles
26 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
WHAT IS GREATEST THREAT TO EUROPEAN PROPERTY MARKETS?
Increased forced sales by banks or others
Economic slowdown/weakness in Asia Pacific
Inability of investors to source new debt
A break-up of the euro zone
Government policy measures relating to property
Economic slowdown/weakness elsewhere in the world
Other financial / political crisis
Domestic economic measures/government austerity policies
US tapering, rising interest rates and/or threat of inflation
Perception that property has become over-priced
0% 5% 10% 15% 20% 25% 30% 35%
Source: CBRE European Investor Intentions Survey 2014
62% of investors pick
one of thesethreats
27 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
WHAT EFFECT WOULD UK EXIT FROM EU HAVE ON UK’S ATTRACTIVENESS FOR INVESTMENT?
Makes UK a much less attractive location
Makes UK a slightly less attractive location
Makes no difference
Makes UK a slightly more attractive location
Makes UK a much more attractive location
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
UKNon-UK
Investor domicile
Source: CBRE European Investor intentions Survey 2014
28 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
INVESTOR INTENTIONS Key themes 2014
More confidence in Europe
Resurgent interest in Spain
Investors moving up risk curve Most attractive asset types
outside prime/core
Greater appetite for secondary
Higher purchasing activity in 2014
Markets more crowded and competitive
Perception of over-pricing as threat
29 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014
PANEL DISCUSSION LEAD BY JONATHAN HULL
Marc Giuffrida
Executive Director, Singapore
Adolfo Ramírez-Escudero
President, Spain
Peter Schreppel
CEO, Germany
JonathanHull
Managing Director, EMEA
Chris Brett
Head of International Capital Markets, UK
PANEL