REAL ESTATE - A study of European portfolio transactions claims new supply and niche portfolios will drive continued investment in the real estate sector.
The report, published last week by Sireo Research and the Centre for European Economic Research, values the European property market at €6trn – around 65% of it investible. Institutional investors hold €2trnbn of it, with a further €2trnbn accounted for in potential new supply from long-term owners.
Sireo cited the German market as having the most significant investible potential because of the availability of commercial property. However, Sweden reported the highest number of transactions.
Across Europe, the establishment of real estate as an independent asset class and the sector’s closer linkage with capital markets in need of investment products had driven the consistently high volume of portfolio transactions.
The largest European transaction to date involved the €7bn sale of residential property firm Viterra in 2005.
Overall, the researchers identified a pretty much continuous growth trend for portfolio transactions since 1997 for the UK and Germany, and since 2001 in the rest of Europe.
Forecasting continued "extensive investment", the report extrapolated from diversification of real estate sub-sectors – such as pubs in the UK – a trend towards greater specialisation.
The survey was based on Sireo’s database of more than 1,300 transactions in 25 markets.