The U.K. looks poised to lead a European real estate resurgence this year as international investors return capital to the region’s strained property market.
An anticipated fall in interest rates and modest economic revival will spur inflows from overseas investors looking to capitalize on “increasingly attractive pricing levels,” new research from international property firm Savills suggests.
U.S., Israeli, Japanese and Taiwanese investors are set to lead that charge, spearheading a 20% rebound in real estate investment activity in 2024 as they pump cash into Britain, Germany, Spain and the Netherlands, according to the research.
“Certainly, it looks like we’ve gone beyond the worst and we’re having a little bit of creep on the recovery,” Rasheed Hassan, Savills’ head of global cross border investment, told CNBC.
“The U.K. is one of the most heavily discounted markets,” he added, noting that it moved “hard and fast” but that its fundamentals — namely a deep market, easy accessibility and limited domestic competition — remain in tact.
European real estate revival
Britain ranked as the top European destination for cross-border investment in CBRE’s 2024 European Investor Intentions Survey, with investors pointing to its discounted rates and high return potential. It was followed by Germany, Poland, Spain and the Netherlands. London was dubbed the most attractive city followed by Paris, Madrid, Amsterdam and Berlin, the survey found.
“London is one of those few cities which consistently demonstrates its resilience in the face of challenging economic headwinds and remains a major focal point for global capital,” Chris Brett, managing director of CBRE’s European capital markets division, said.
The U.K. is now forecast to attract one-third — or around $13 billion — of 2024 outbound investment from the U.S. alone, according to estimates from Knight Frank. Germany, Spain and the Netherlands are set to be the next biggest beneficiaries of U.S. cash. Source: CNBC
