LOS ANGELES—Price movements in the US, coupled with improvingprospects overseas, have led US-based investors to increase theircommercial real estate acquisitions in Europe by75% year-over-year, according to the latestresearch from CBRE.

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Notwithstanding expanding investment volumes in domesticmarkets, US investors significantly increased their activity inEurope in H1 2014 with $15.5 billion (€11 billion)of acquisitions, compared to more than $8billion (€6.3 billion) in H1 2013. The UKattracted the majority of this investment (36%), withGermany (23%) and France (17%)also favored destinations. Ireland andItaly received over $.75 billion (€.5 billion) ofU.S. investment.

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The jump in buying activity from US-based investors was the mostsignificant shift in terms of buyer nationality in Europe, with USbuyers responsible for 63% of cross-regional investment in theregion. Also notable, was the shift to positive net investment fromUS investors. In recent years, sales have nearly matchedacquisitions; however, in H1 2014 alone, acquisitions have exceededsales by approximately $6 billion (€4.5 billion).

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Chris Ludeman, global president, capitalmarkets, CBRE, says that while the volume of business in UScommercial real estate is expanding, price movements in domesticmarkets and improving prospects in the European economy have led USinvestors to target Europe more ambitiously than in recentyears.

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“This investment is dominated by fund managers, rather thaninvestors buying directly, so there is an extent to which theyrepresent a conduit for global capital rather than just U.S.money,” Ludeman says. “Nonetheless, the increase over the last fewquarters has been remarkable.

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“Another feature is the range of locations that US investors areseeking out with general pricing in Europe seen as attractive and'recovery play' investments more accessible currently than in theU.S.”

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U.S.-based investors targeted a range of European locations,with assets acquired in at least 15 European countries in H1 2014.The city that attracted the biggest concentration of U.S.investment was Paris, at more than $2.5 billion(€1.9 billion).

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The growth in "recovery play" investment was also evident in H12014. In Ireland, where the vast majority of transactions tookplace in Dublin, overseas buyers have been the main driver ofgrowth in investment, with U.S. capital making the biggestcontribution. Investors such as Blackstone, Hines, KennedyWilson and Lone Star all made significantacquisitions in Dublin in H1 2014, drawn in by theeconomic recovery story and prime yields that are attractivecompared to many other European capitals. U.S. investors accountedfor 43% of the investment volume in Dublin in H1 2014.

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U.S. investors have also increased their activity in theNetherlands—a market in which they have nottraditionally been active. These acquisitions were spread acrossthe whole of the country, but did include some significantpurchases in the main commercial city,Amsterdam.

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David Phillips

David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.