Portfolio transactions have made a comeback as confidence has returned to European markets, PropertyEU’s outlook briefing in Hamburg has heard.
Portfolio transactions have made a comeback as confidence has returned to European markets, PropertyEU’s outlook briefing in Hamburg has heard.
Frank Billand, CIO of Union Investment, told the panel discussion that competition from foreign investors has helped revive the appetite for portfolios after large-scale transactions fell out of favour in the wake of the 2007 crisis.
‘The opportunity to upgrade your portfolio these days is very good,’ he said. ‘I personally never thought that we would see portfolio deals again after 2007, but we have done two or three of them.’
He added, however, that investors were taking a more cautious approach, looking for more balanced assets with a lower LTV and high occupancy rates to reduce risk.
Watch Dr Frank Billand: Effect of global capital in local investors
Billand said: ‘There is a difference to seven years ago. It’s no longer these enormous LTVs that we saw in those days… Nowadays it’s more 60% or 65%, so we have more equity in the business, and you really have to mix portfolios with good assets and normal assets. Seven years ago [we were asked] please come back with a big portfolio, [that was] the first request, and the second was a lot of vacancy.’
