Greece

http://www.ft.com/cms/s/0/1066d5e2-1301-11e3-a05e-00144feabdc0.html#ixzz2dv1eMdXb September 1, 2013 Property deals surge in peripheral EU countries By Ed Hammond, Property Correspondent The appetite for commercial real estate in Europe’s most beleaguered countries has soared during the past three months, underlining the growing confidence among global investors that the continent’s property crisis is nearing an end. The value of property transactions in Europe’s peripheral economies – Portugal, Italy, Ireland, Greece and Spain – hit €2.3bn during the quarter to July, an increase of 60 per cent on the previous three months, according to research for Cushman & Wakefield, the property consultancy. The surge in activity is almost entirely the product of a return of international investment into property markets that, for the past six years, have been considered too risky at almost any price. Non-domestic purchases of offices and retail property in Spain, for instance, rose by almost 10-fold from the first three months of the year to €642m. In Italy, the quarter-on-quarter increase was a more modest 190 per cent. “Club Med was out of bounds for most investors just a few months ago,” said David Hutchings, head of research in Europe for Cushman & Wakefield. “But it has taken only a slight improvement in risk tolerances for the bigger markets of Spain and Italy, in particular, to start gaining attention again.” And it is not just the private equity investors – typically the first movers in Europe’s distressed property markets – who have started to sniff out deals in the peripheral economies. Large, traditionally low risk investment groups, such as insurers and pension funds, are on the hunt for fixed assets too. Axa Real Estate, the property arm of the French insurer, has completed deals in both Italy and Spain during the second quarter of the year. “Investors, including us, are starting to move slowly up the risk curve again and are seeing those markets open up,” said Anne Kavanagh, global head of asset management and transactions at Axa Real Estate. “But there will not be a rush into the peripheral countries; it was, after all, only a year ago that we were talking about a possible break up of the single currency.” The burgeoning activity puts the cluster of countries, often unflatteringly referred to as “the PIIGS”, at odds with the wider trend in Europe’s property market, where demand, having risen steadily for two years, ebbed during the past three months. The large cities of the continent, London in particular, have become saturated with competition from US, Asian and Middle Eastern property buyers, driving down yields and forcing many European investors to eek out returns in regional or higher risk submarkets. Continue reading →