US investors snapping up cheap euro assets

US investors are buying European commercial property at a record pace as the dollar’s eight-month rally and struggling economies on the continent make offices, shops and warehouses cheap. 

US spending on European commercial real estate last year was just short of the 2007 peak, said to Real Capital Analytics.

The record may be broken this year after a strong first quarter, said Simon Mallinson, RCA’s managing director for Europe, the Middle East and Africa.

“With the US markets becoming increasingly expensive and with the currency advantage we are starting to see, the US institutions are making a big push for Europe,” said Richard Divall, head of cross-border capital markets at broker Colliers International. “Europe is the region of the world that still has distress.”

“We’re about to come into a real currency war,” Jenny Buck, head of property and alternative investments at supermarket operator Tesco Plc’s pension fund, said on March 18 in Oxford.

“We will see an increasing wall of money coming in which probably means that current peaks may well continue for longer than they would have otherwise,” he said.

US investment in European commercial property climbed 90% last year to €41.2bn, just shy of the 2007 peak of €41.5bn, RCA said. Another €8.9bn has been spent this year .


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