According to Savills latest research, pricing levels are increasingly attracting North American investors to European real estate. In 2022, North Americans invested more than Europeans in cross-border deals, €48 billion compared to €36.6 billion, which is 31 percent above the five-year average for the former. In the Czech Republic, investors from North America spent €321 million in 2022 (40 percent above the five-year average), while European buyers (excluding domestic capital) acquired assets worth €459 million.
The international real estate advisor anticipates that North American investors will again be the largest investor group in European real estate by the end of the year, but on the Czech market, it will most probably be domestic buyers again.
James Burke, Director of European Capital Markets & Global Cross Border Investment at Savills, says: “We foresee a diverse range of cross-border investors being attracted to European real estate during the course of 2023. Much of this will be opportunity-led, with investors engaging in processes where there is a discernible pricing adjustment.”
“Investors with less appetite for risk should focus on strategies targeting income-driven assets in the most appealing locations and sectors in Europe. These should be chosen based on long-term trends, thereby offering greater stability and resilience to market fluctuations.”
Lydia Brissy, Director of European Research at Savills, comments: “All in all, we expect investment activity to remain subdued in Europe until the second half of the year when the economy will slowly start to pick up. We anticipate total European real estate investment volumes for 2023 to range between €230 billion and €240 billion, a decrease of 17 percent-20 percent y-o-y.”
Fraser Watson, Director of Investment Advisory at Savills CZ and SK, adds: “The situation in the Czech republic will most probably copy the European trend, with the muted activity until summer and an uptick in activity during the second half of the year. Despite the lack of current ongoing deals, I think we could still reach an annual transaction volume of around €1.5 billion, i.e. just over 10 percent down y-o-y.”