“It’s a good time for Canadians who are looking to diversify out of Canada,” says international real estate advisor
Investors started the year holding on to cash, out of fear about how the European financial crisis might unfold. They are beginning to spend again now, but at significantly lower levels than before the crisis.
Financiers are so cautious that even German developers with sensible projects in good locations with credit-worthy tenants under long-term leases have to scramble for equity.
In the pre-crisis, German bankers would have financed those projects at 80 to 90% of cost, whereas now they might finance 60% maybe 70%, if it’s absolutely the best-of-the-best triple A in every respect,” says Atlantic Partners Ltd. president Bradley Olsen. “That gap is a very significant gap for the developers who weren’t used to putting up that kind of equity. They’re out scrambling looking for equity sources.”
When it comes to acquisition, most foreign investors focus on major markets in Europe, says Olsen. London remains the top receiver of international capital in the office sector, followed by Paris and Munich, then Hamburg and Dusseldorf. Sweden, Norway and Finland are also receiving lots of attention in the office sector, while Poland is attracting everyone.
“Warsaw has had a pretty good run in the last twelve months,” says Olsen. “Poland is the next core market in Europe, in particular for logistics and retail, perhaps for investors too. I think it will continue to attract a lot of capital.”
