A new study published today shows that Irish investment capital accounted for the second highest proportion of the €244.1 billion spent on property across Europe in 2007.
Irish investment of €13.9 billion was put into European property deals last year. In contrast, the Irish business sector does not even get a total of €200 million in venture capital investment.
The study, published by UK commercial property agents Jones Lang LaSalle, (click EMEA on left-side panel and then the pan-EMEA link) says that despite the onset of the credit crisis in august, 2007 was the second strongest year on record for investment activity in Europe. Property transaction volumes fell by just 4%, bringing last year's volumes close to the record volumes seen the previous year.
UK investors accounted for the highest proportion of investment activity, spending €63 billion, while the French and Dutch were also major buyers with a spend of €10.8 billion and €8.8 billion respectively.
Jones Lang LaSalle says that the UK remained Irish investors' main target, attracting €5.7 billion of Irish investment funds in 2007. France and Germany were the next most favoured with Irish investors spending over €1.3 billion each.
Scandinavia is also attracting Irish investors, while Eastern Europe also continues to be a popular destination for Irish investment.
Corporates were again major sellers in 2007 with sales of €22.6bn amounting to nearly 10% of total sales. The majority of sales were in Germany (€5.1bn), Spain (€4.6bn), the UK (€3.9bn) and France (€2.5bn). This included sale and leasebacks by Tesco (UK), Banco Santander (Spain) and Metro AG and Deutsche Telecom (Germany).
Despite the credit crunch and the share price collapse of recent months, there was still plenty of evidence of a strong appetite for good value overseas investment opportunities among Irish investors, commented John Moran, European Director of Jones Lang LaSalle's Capital Markets.
He said that retail and offices remain the dominant investment sector.
He said the main reason for the "constrained deal flow" so far in 2008 is the testing of price levels. In recent weeks, some re-pricing has taken place in the international property market.
2008 will be marked by a narrower spectrum of investors, the study says. "As prices across sectors and markets correct even further as the year progresses, attractive buyside opportunities will become evident across the wide spectrum of markets that make up the euro zone region," it says.
