Europe’s Coming Property Investment Rush



In investing news from Europe, Bouwfonds European Residential fund adds residential buildings to their stable of investments. Their news of €40 million in investments in Germany and France comes at a time when US investors are snapping up distressed properties across unstable Europe. Will Europe see a property investment rush?

Paris Loft Courtesy © Uolir & Fotolia

Paris Loft Courtesy © Uolir & Fotolia

Bouwfonds European Residential ‘s soon to be completed 56-apartment property in old town Bonn, is the firms first Rhine property. This property consists of a three floor apartment complex capped by a luxury penthouse. The building offers some 3,306 m² of living space. A second investment at Evry in the Ile-de-France region, is a student housing affair targeting the university population there. This second investment has a rentable area of 2,039 m², over five floors. Another complex of almost 400 apartments is located in the Rangueil district of Toulouse, just adjacent to “Université Paul Sabatier” there. Another student accommodation, this three building affair targets student needs as well.

Bouwfonds European Residential fund now owns interests in Germany, Denmark, France, the Netherlands, Norway and Sweden. The company reports occupancy at near 100 percent. Xavier Jongen, Fund Director Bouwfonds European Residential Fund, had this to say about the above acquistions:

“Whilst continuing to invest simultaneously in several core European countries in order to benefit from non-correlated European residential markets, I regard the student housing market as the most stable part of the residential market in France, and see continuing rental and capital appreciation opportunities in the mid-priced residential letting market in Germany.”

Well priced properties, even with extremely high occupancy rates, are obviously available across Europe. News from the New York Times details American investors capitalizing on Europe’s distressed economy.  The incentive is great for institutional investors given several factors including the fact most Europe properties are such a drag on banks on the continent. The debt burden for German and other banks saddled with bailout debt, is what the NYT article calls “interesting” for North American investment groups.

As further evidence of what may become a sort of “run” on Europe real estate, Bloomberg Businessweek reports MGPA, a fund manager controlled by Macquarie Group Ltd. (MQG) raising money for the specific purpose mentioned. Europe property, compared with other markets around the world, may indeed be the potential investors look for.

Here in Germany we know from listings in our own Rhineland Pfalz on the Luxembourg border, shows a lot of listings which never existed before the crunch. One instance, open land, was a commodity we asked about 5 years ago, our broker looked stunned at anyone even seeking such property. Today there are hundreds of hectares available.

We will stay abreast of the situation and keep you informed.