1 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014

1 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014


EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014

Dr Peter DamesickChairman EMEA Research

12 March 2014


2007 2008 2009 2010 2011 2012 20130

50

100

150

200

250

300

350

400

450

500

Americas

EMEA

Asia Pacific

GLOBAL COMMERCIAL REAL ESTATE INVESTMENT

$ billion

Source: CBRE Research, RCA; * All commercial real estate and hotels

Change 2013 vs 2012

Americas +16.5%

EMEA +34.3%

Asia Pacific +28.0%


2010 2011 2012 2013 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

0%

5%

10%

15%

20%

25%

30%

South America

North America

Middle East

Australia

Asia

Africa

% European Market

€ billion

Source: CBRE Research

CROSS-REGIONAL GLOBAL CAPITAL BOOSTS EUROPEAN REAL ESTATE INVESTMENT

0


GLOBAL REAL ESTATE INVESTMENT IN EUROPEMarket distribution, % total purchases

London Paris Germany UK Regions Rest of Europe0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

20122013



€ billion

CROSS-REGIONAL GLOBAL CAPITAL FLOWS IN EUROPE2013 by Market

Asia Mid-East North America -

5,000

10,000

15,000

20,000

25,000

Europe Other

UK Other

Germany

Paris (IDF)

London


0


20

04

.Q1

20

04

.Q3

20

05

.Q1

20

05

.Q3

20

06

.Q1

20

06

.Q3

20

07

.Q1

20

07

.Q3

20

08

.Q1

20

08

.Q3

20

09

.Q1

20

09

.Q3

20

10

.Q1

20

10

.Q3

20

11

.Q1

20

11

.Q3

20

12

.Q1

20

12

.Q3

20

13

.Q1

20

13

.Q3 -

5,000

10,000

15,000

20,000

25,000

Rest of UK

Central London

Source: Property Data, CBRE Research

£ billion

COMMERCIAL REAL ESTATE INVESTMENT IN UK£53 billion transacted in 2013 – £21 billion in just Q4

0


20

07

.Q1

20

07

.Q2

20

07

.Q3

20

07

.Q4

20

08

.Q1

20

08

.Q2

20

08

.Q3

20

08

.Q4

20

09

.Q1

20

09

.Q2

20

09

.Q3

20

09

.Q4

20

10

.Q1

20

10

.Q2

20

10

.Q3

20

10

.Q4

20

11

.Q1

20

11

.Q2

20

11

.Q3

20

11

.Q4

20

12

.Q1

20

12

.Q2

20

12

.Q3

20

12

.Q4

20

13

.Q1

20

13

.Q2

20

13

.Q3

20

13

.Q40

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

5,000

10,000

15,000

20,000

25,000

Ireland

Portugal

Spain

Italy

Rolling 12 month

€ million

COMMERCIAL PROPERTY INVESTMENT IN EURO PERIPHERY Ireland, Spain, Portugal, Italy



EUROPE’S FASTEST GROWING INVESTMENT MARKETS IN 2013Cities with biggest relative increases in sales 2013 vs 2012

Rome

Brussels

Geneva

Barcelona

Helsinki

Dusseldorf

Prague

Dublin

Milan

Madrid

0% 50% 100% 150% 200% 250%


INVESTOR INTENTIONS SURVEY RESULTS 2014


SURVEY RESPONDENTS BY TYPE OF ORGANISATION

43%

14%

11%

11%

10%

6%5%

Fund/ asset managerPrivate property companyPension fund/ insurance company/ sovereign wealthListed property company/ REITPrivate equity firm/ venture capitalBankOther

Source: CBRE European Investor Intentions Survey 2014


WHICH GLOBAL REGION IS MOST PREFERRED FOR INVESTMENT?

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013

2014



INVESTING OUTSIDE EUROPE IN 2014?

Yes, more than in 2013

Yes, same amount as in 2013

Yes, less than in 2013

No

0% 10% 20% 30% 40% 50% 60% 70%




INVESTMENT OUTSIDE EUROPE ON 2014: WHICH REGIONS?Percentage of respondents who will invest outside Europe

Emerging Asia

24%

Pacific

21%78%

North America

South America

17%

Africa Middle East

Developed Asia

52% 5% 4%

* Respondents could choose more than one region


Source: CBRE Asia Pacific Investor Intentions Survey 2014

ASIA PACIFIC INVESTORS: WHERE WILL THEY INVEST GLOBALLY IN 2014?Percentage of respondents who will invest outside Asia Pacific

Central and Eastern Europe

23%68%

Western Europe South America

8%

North America

57%

Africa

2%

Middle East

2%

* Respondents could choose more than one region


MOST ATTRACTIVE COUNTRY IN EUROPE FOR INVESTMENT PURCHASES

UK Germany Spain Poland Nether-lands

France Italy Nordics Other CEE Other 0%

5%

10%

15%

20%

25%

30%

35%

40%

2013

2014



Barcelona

Hamburg

Warsaw

Dubllin

Amsterdam

Paris

Munich

Berlin

Madrid

London

0% 5% 10% 15% 20% 25% 30% 35%

20142013

Dublin

Rise in attractiveness

of Spanish cities

MOST ATTRACTIVE CITY FOR INVESTMENT PURCHASES



Other

Retail Warehouses

Hotels

Light Industrial

Retail High St

Residential

Shopping Centres

Logistics

Office

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

20142013

MOST PREFERRED SECTOR FOR INVESTMENT PURCHASES


Stronger preference


TOP 3 ‘MOST ATTRACTIVE’ FOR PURCHASES IN 2014

Countries Cities Sectors


1. UK 29%

2. Germany 21%

3. Spain 19%

1. London 30%

2. Madrid 14%

3. Berlin 9%

1. Offices 39%

2. Logistics 16%

3. Shopping centres 11%


MOST PREFERRED ASSET TYPE FOR PURCHASES


Prime or core assets Good secondary Opportunistic / value-added

Distressed assets0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2013

2014


RISK APPETITE FOR SECONDARY ASSETS IN 2014 COMPARED WITH LAST YEAR


Much higher Higher Same Lower Much lower0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%49%


MOST PREFERRED ASSET TYPE FOR PURCHASESPercent of investors by global region, 2014

Source: CBRE Investor Intentions Survey 2014

Prime or core assets Good secondary Opportunistic / value-added Distressed assets0

10

20

30

40

50

60

Asia PacificNorth AmericaEurope


INVESTMENT AND INTEREST IN ALTERNATIVE SECTORS


Self Storage

Automotive/Car Parks

Retirement living

Infrastructure

Healthcare

Leisure

Student Living

0% 5% 10% 15% 20% 25% 30% 35% 40%

Invested

Actively interested


EXPECTED PURCHASING ACTIVITY THIS YEAR COMPARED WITH LAST YEAR

More than 20% higher

Between 10%- 20%

higher

Up to 10% higher

About the same

Up to 10% lower

Between 10% - 20% lower

More than 20% lower

0%

5%

10%

15%

20%

25%

30%

35%

40%

2013

2014


67% of respondents said purchasing activity would be higher in 2014


WHAT IS THE BIGGEST OBSTACLE TO ACQUIRING ASSETS IN EUROPE?

Low market transparency

Transaction costs/time to complete

Lack of investment partners

Cost/availability of debt

Competition from other investors

Asset pricing

Availability of assets

0% 5% 10% 15% 20% 25% 30% 35% 40%


82% of investors

cited these 3obstacles


WHAT IS GREATEST THREAT TO EUROPEAN PROPERTY MARKETS?

Increased forced sales by banks or others

Economic slowdown/weakness in Asia Pacific

Inability of investors to source new debt

A break-up of the euro zone

Government policy measures relating to property

Economic slowdown/weakness elsewhere in the world

Other financial / political crisis

Domestic economic measures/government austerity policies

US tapering, rising interest rates and/or threat of inflation

Perception that property has become over-priced

0% 5% 10% 15% 20% 25% 30% 35%


62% of investors pick

one of thesethreats


WHAT EFFECT WOULD UK EXIT FROM EU HAVE ON UK’S ATTRACTIVENESS FOR INVESTMENT?

Makes UK a much less attractive location

Makes UK a slightly less attractive location

Makes no difference

Makes UK a slightly more attractive location

Makes UK a much more attractive location

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

UKNon-UK

Investor domicile

Source: CBRE European Investor intentions Survey 2014


INVESTOR INTENTIONS Key themes 2014

More confidence in Europe

Resurgent interest in Spain

Investors moving up risk curve Most attractive asset types

outside prime/core

Greater appetite for secondary

Higher purchasing activity in 2014

Markets more crowded and competitive

Perception of over-pricing as threat


PANEL DISCUSSION LEAD BY JONATHAN HULL

Marc Giuffrida

Executive Director, Singapore

Adolfo Ramírez-Escudero

President, Spain

Peter Schreppel

CEO, Germany

JonathanHull

Managing Director, EMEA

Chris Brett

Head of International Capital Markets, UK

PANEL

Documents

1 CBRE | EUROPEAN CAPITAL MARKETS AND INVESTOR INTENTIONS 2014