The US fund manager PRICOA has bought Arlington Securities, a specialist UK business park developer, for £270m ($460m). The move is the latest in a series of US acquisitions of European developers, but with North American real estate stocks underperforming, even the depressed Dow Jones index, some property players are questioning whether the flow of money across the Atlantic might soon be turned off.

Arlington was bought by British Aerospace (BAe) at the height of the last property boom for £278m, with the aim of using its property expertise to add value to some of BAe's redundant sites, like the Cowley car plant in Oxford and the former Hawker aircraft factory in Gloucester. But in recent years the aircraft maker has cut back to its core defence interests and it has been looking for an exit route from Arlington. A flotation was considered but a trade sale became more attractive as the stock market became more jittery.

PRICOA's stategy will be to fatten Arlington up for a flotation in three to five years' time. This will involve bolstering the balance sheet by building an investment portfolio. Until now Arlington has sold on the individual buildings on its parks to institutional investors once they are completed and let. Now Arlington will keep a proportion for itself as investments. Expansion into France and Germany is also on the cards.

A similar strategy of buying European property companies and growing them with the utimate aim of a flotation has been followed by the leading US Real Estate Investment Trust (REIT) Security Capital which has spent over £1bn on five purchases since spring 1998: First was Akeler, a business park and office developer responsible for the highly-successful Doxford International project in Sunderland. This purchase was followed in quick succession by City & West End, a specialist London office developer; London & Henley, an up market residential developer; Benheim, a Belgian car park operator and Acorn, which own a chain of self-storage centres across the UK.

These companies all come under the umbrella of Security Capital Global Realty, but another Security Capital company, Prologis, has moved into the distribution property sector in a big way, buying the Swedish cold store operator Frigoscandia for $395m and the specialist UK warehouse developer Kingspark for £100m.

So why have the Americans moved into European property in such a decisive way at this stage of the cycle? The main driving force is a perception that the US markets - after a seven year bull run - may have passed their sell-by date. In almost all of the major US markets there is a large amount of development coming on-stream, bringing risks of oversupply which will cut the spectacular returns which US real estate has generated in recent years.

If the REITS and US funds are to maintain the 20%-plus returns which they have been generating then they have to look elsewhere. For example, the US fund manager Heitman Fi-nancial is a big believer in Central Europe. Its European head Christopher Merrill says that Americans perceive Europe as offering high risk/ high yield opportunities. But he is letting property in Poland to major US companies like Bristol-Myers Squibb on leases denominated in dollars with parent company guarantees, so there is not even a currency risk. In reality, these deals are low risk/high yield." he says.

Heitman is now working on the new fund launched jointly by Lehman Bros, the French contractor Bouygues and the property consultant Jones Lang Wootton, which aims to build as many as a dozen new shopping centres in the Czech Republic, Poland and Hungary. The first site acquisitions are expected to be announced within a matter of weeks.

However, just as Europe's property industry is getting a taste for the mighty greenback, there are signs that the Americans may be on the verge of retrenching. REIT stocks have fallen by an average of 16% this year, which is hitting the flow of new investment, and the Federal Reserve has warned US banks about their real estate loan books, which means that credit to finance overseas ventures will in future be harder to come by.

But although the pace of acquisitions may slow, the biggest cultural impact of US expansion, in the longer term, may be on the advisory side of the business. Three of Europe's top property consultants have sold out to US firms this year, with Richard Ellis falling to Insignia, Hillier Parker going to CB Commercial and Healey & Baker handing over equity to Cushman & Wakefield. And the long-awaited takeover of Jones Lang Wootton by LaSalle Partners has finally been announced.

The new business - Jones Lang LaSalle - will be one of the biggest real estate consultancy and fund management operations in the world with annual billings of over £440m ($750m). The combined company will have £11.9 bn of real estate assets under management , and will employ more than 6,000 staff in 34 countries around the world.

Stuart Scott, chairman and CEO of LaSalle, will head the new organisation, retaining his titles, while JLW's chief Chris Peacock will become president and deputy CEO.

In revenue terms, the business is the closest yet to a truly global consultancy, with the US only accounting for 45% of income, Europe 33%, Asia 12% and Australia 10%."