Cross-border investment flows increased by 10% to €38.4 billion ($48 billion). Cross-border rose sharply as a proportion of total investment, from 40% in 2002 to 48% in 2003.
The UK was again the most active market, accounting for 50% of all activity. And the Nordic region (Sweden, Denmark and Finland) overtook France as the second active investment market after the UK, due primarily to strong activity from foreign investors in Sweden. The region accounted for 12% of total investment compared to 10% in France.
The German investment market was weaker in 2003, with volumes down by 39% as a domestic investors looked cross-border for better market fundamentals and growth prospects. During 2003, Germany's powerful open-ended funds received more than €14 billion ($18 billion) of capital inflows and invested equity of at least €10 billion ($13 billion) into real estate, according to BVI.
Looking ahead JLL expects another strong year in 2004. Although the recovery in the equities markets may reduce cash inflows to opened ended funds and private equity funds, capital is already available to sustain activity, and institutional investors are poised to take up any slack in the market.
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