Since 2010, we have witnessed a growth of capital from Asia into European real estate. A total of €50bn has been invested over the last five years. In the recently published Deloitte EMEA magazine, REflexions, we examined this trend and identified 7 key, but not exclusive, reasons why we think movements of capital from Asia into European real estate will increase over the medium term and here they are:

  1. A long-term demographic shift is driving growth in savings and pension institutions within Asia, with growing inflows but limited opportunities to invest domestically. Meanwhile, growth in high and ultrahigh net wealth in Asia is leading to a rise of family offices
  2. Sovereign wealth funds' appetite for real estate is on the rise
  3. An overhaul of institutional regulations across Asia over the last three years is facilitating greater overseas investment in real estate
  4. The weakness of the euro has increased the attractiveness of European real estate to overseas investors
  5. The attractive risk/return profiles on certain European markets are not always easily obtainable in domestic Asian markets
  6. Financial and political instability driving investors towards perceived safe havens and in search of diversification opportunities
  7. An explosion in the number of Asian (particularly Chinese) tourists visiting continental Europe.

We believe all indicators suggest investment levels will remain strong and over the medium term, will see an increased movement of capital from Asia into European real estate.

For more information on this article you can download a copy of REflexions magazine here.

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