Listed Asian listed buyers pipped their European peers at the post by seizing two of the three biggest deals in the UK in the first half of this year, transaction data compiled by PropertyEU indicates. If not for the acquisition of the Trafford Centre in Manchester by London-listed Capital Shopping Centres - which was announced in late 2010 but not formally completed until January this year - their victory would have been outright.
Leading European brokerage firms expect more Asians to put their money into trophy assets in London in the coming period. But some are also eyeing selected cities in Continental Europe. Last summer it emerged that the Hong Kong Monetary Authority (HKMA) is planning to look at office properties in Paris as well as London as part of its $500 mln drive to boost its European portfolio. According to a report in The Times, HKMA has already purchased its first building in London's City financial district this year through the Exchange Fund, an investment vehicle HKMA manages. Meanwhile JP Morgan Asset Management's $424 mln acquisition of 10 Aldermanbury Square in London is believed to have been on behalf of HKMA’s investment portfolio.
Asian money also continues to flow from the non-listed sector.
Simon Redman, head of product management at Invesco Real Estate, sees more Asian capital coming into Europe than from the US at present, although he says this may change. 'I see lots of reasons why the Americans are not coming, but as they move through the cycle we may see that change. The US has its own big domestic market. At this point in the cycle, there's still distress in those markets and value-add opportunities. As a result, there's quite a lot of reticence to move out of the US, to do so would require a big premium. The Dutch and even German investors are used to investing outside their home countries, they don’t automatically need a premium to invest abroad.'
A comprehensive analysis of the largest investors and individual deals carried out in the first half of 2011 appears in the September edition of PropertyEU Magazine. Click on the link below to subscribe