Press Release: London Captures Lion’s Share of Global Property Investment

Press Release: London Captures Lion’s Share of Global Property Investment

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12 October 2010, London / Munich – London captured 27 percent of all cross-regional investment transactions during 2009 and the first half (H1) of 2010, according to new research by leading real estate advisors CB Richard Ellis (CBRE), which explores, among other trends, the degree to which investors making direct commercial real estate investments outside their domestic markets gravitate towards the largest, most liquid commercial property markets.

Unsurprisingly, the new analysis showed that overall real estate investment activity has been substantially lower during the recovery period (2009 and H1 2010) than was the case during the boom market (2006 and H1 2007). On average, the fall in investment activity has been just over 70%, but the decline in North America has been much greater, while the smaller regions (Africa, Middle East and South America) have seen property investment activity increase.

(See chart on page 3 for detailed global investment flows data, as represented above.)

When only cross-regional investment activity is examined, an even steeper decline in activity is evident. Total investment turnover where the buyer was from a different region to where the property is located, fell from €134.8 billion in the year and a half at the peak of the market to €22.4 billion in 2009 and H1 2010; a decline of 83%.

A prominent feature of the current cross-regional investment landscape is the degree to which it is concentrated in a small number of major cities. This was evident during the boom period, but has become even more pronounced during the recent recovery in commercial property markets. Of the €22.4 billion of cross-regional investment activity recorded over the last 18 months, over €6 billion has been invested in London. This cross-region concentration also made London the world’s most international market, with buyers of 27 different nationalities completing acquisitions in London over that period.

Cross-Regional Real Estate Investment, 2009 and H1 2010 –  Selected Cities ( million)


Source: Real Capital Analytics (RCA), CB Richard Ellis

Although at much lower levels, other major world cities – such as Paris, New York and Sydney – also feature among the top destinations for cross-regional investment. In fact, the top 10 targets for cross-regional capital account for 55% of all activity. This represents a significant increase in the concentration of activity in the largest markets. At the peak of the market in 2006 and H1 2007, the top 10 cities attracted less than 40% of cross-regional investment. This change represents a flight away from any form of risk.

Jonathan Hull, Head of EMEA Capital Markets, CB Richard Ellis, said: “As the market becomes more stable over the coming months, we expect that the major cross-regional investors will broaden their horizons and that London will become less dominant as a destination for international capital. To an extent, this has already been seen in 2010, with acquisitions by the Korean National Pension Service of the Sony Center in Berlin and a share in the O’Parisnor shopping centre in Paris. A broader cross-section of locations for cross-regional investors would have implications for the German market, as during the boom, Frankfurt, Munich and Hamburg also featured in the top 10 destinations for cross-regional capital.”


“Boom” and “Recovery” Real Estate Investment Trends (m)

Period Region Total Investment Activity Cross-Regional Activity
BOOM2006 & H1 2007 AFRICA 1,740 960
ASIA 76,310 17,702
EUROPE 362,035 79,891
M EAST 1,508 335
N AMERICA 469,690 28,103
PACIFIC 18,659 6,155
S AMERICA 2,724 1,640
2009 & H1 2010 ASIA 67,893 3,136
EUROPE 118,020 12,355
M EAST 2,816 190
N AMERICA 68,849 3,239
PACIFIC 10,841 2,790
S AMERICA 2,756 407

Source: Real Capital Analytics (RCA), CB Richard Ellis

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About CB Richard Ellis

CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2009 revenue). The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide.

CB Richard Ellis established an office in Bangkok in 1988, followed by Phuket office in 2004, and Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company’s website at