Cross-border investors dominate largest UK deals

Foreign equity seeking a home in the perceived safe haven of the UK real estate market outgunned domestic investors at the turn of 2011.

PropertyEU Research recorded EUR 4.9 bn of large direct property transaction across all segments in the UK during December 2011 and January 2012. Cross-border investors accounted for EUR 2.6 bn, or 53%, of the full volume.

Malaysian institutional investor PNB, a relative newcomer to the market, carried out the largest UK transaction in the period. It acquired the office complex, 1 Silk Street in London, for some EUR 420 mln from US firm Beacon Capital. Around the same time PNB was rumoured to be the frontrunner to buy the majority of Kanam’s EUR 1 bn office portfolio in the UK capital.

The UK was the most active European market in the review period, followed by France with a volume of EUR 4.2 bn and Germany with EUR 1.8 bn. Cross-border investors were the buyers in three of the five top transactions in the UK during the December-January period.

Blackstone acquired the Triangle logistics portfolio from UK REIT London & Stamford for EUR 352 mln in the fourth largest UK deal. The US private equity firm has since added to its UK logistics holdings with the purchase of the 13-asset Teal portfolio from Prologis for a total of $335 mln in February. Ten of the assets were owned by Amsterdam-listed fund, Prologis European Properties.

The fifth largest deal in December-January involved South African investor Kirsh Group acquiring the Tower 42 estate in London for EUR 340 mln.

PropertyEU Research tracks property deals of EUR 20 mln-plus on a daily basis. We have focussed on the flow of reported deals in December and January to finalise the transaction list for 2011 and to launch the 2012 list.

Our analysis of European deals during December and January, along with a final ranking of the top investors in 2011 is published in the March edition of PropertyEU Magazine. Click on the link below to subscribe: