11.02.09
Despite a weakened European commercial property investment market in 2008, sales of commercial real estate by occupiers remained an important source of activity last year. Although there was a sharp fall-off in the amount of public sector real estate sold in 2008, owner-occupier sales maintained their approximately 19% share of the total investment market in 2008, according to figures released today by CB Richard Ellis.
As in 2007, there were some very high profile sale and leaseback transactions during 2008. At the end of the year, Italian banks Intesa Sanpaolo and UniCredit each sold corporate real estate assets valued in excess of €800 million. This continued a trend of bank property sales set at the beginning of the year by Banco Santander’s disposal of its Madrid HQ, the final part of a multi-stage disposal.
Large transactions involving banks were far from the only sale and leaseback activity in the market. In total there were around 600 transactions involving sales by owner-occupiers in 2008. The average deal size was around €33 million, only slightly larger than the €28 million average lot size for the market as a whole. Transactions took place across the full range of property types, including offices, shops and industrial space. The geographic range was also wide, with deals recorded in 20 of the 26 European countries covered by the data.
John Wilson, Head of CBRE’s Corporate Strategies Group for EMEA said: "The corporate market now accepts sale and leasebacks as a sound and competitive source of capital. Growth is being driven by three factors: corporates bridging the current equity gap for specific business initiatives; the more significant corporates creating liquidity within their own balance sheet -- creating a "war-chest" to reduce reliability on banks to improve their own speed of action -- and investors increasingly recognising the opportunity for what are effectively strong-performing asset-backed bonds with quality covenants."
