Foreclosures to lift southern European volumes

Two large transactions helped lift real estate investment volumes in the struggling Italian and Spanish markets to EUR 1.5 bn in the two months to end-January, accordnig to research from PropertyEU. The figure is up more than 100% on the EUR 733 mln recorded in the same period in 2010-2011.

The largest Italian deal recorded by PropertyEU Research involved Auchan. The French retail group bought the half share it did not already own in a EUR 1 bn Italian shopping centre joint venture with US retail REIT Simon Property Group. PropertyEU Research estimates the investment volume at EUR 500 mln. The joint venture, Gallerie Commerciali Italia, owns 46 retail galleries in Italy. Simon no longer has any assets in Italy.

The largest deal in Spain was carried out in December by Pontegadea Inmobiliaria, the property firm owned by Spain's richest man Amancio Ortega. Pontegadea acquired the 157-metre Torre Picasso skyscraper in Madrid for EUR 400 mln.

Transaction volumes are expected to pick up further during 2012 as banks increase disposals of distressed assets. In its latest global distressed property monitor, RICS noted that the countries at the centre of the eurozone debt crisis will be at the forefront of forced selling in the first quarter of this year. 'The Republic of Ireland, Portugal, Spain and Italy expect the highest number of foreclosures,' the report said.

PropertyEU Research tracks reported property deals of EUR 20 mln-plus on a daily basis. We have focussed on the flow of reported deals in December to end-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: