H1 2014 INVESTMENT: Big deals are back in European real estate

The era of big-tickets deals has well and truly returned in European real estate: PropertyEU Research recorded six transactions of €1 bn or above during the first half of 2014.

And, European investors are proving to be just as bold as counterparts from North America, Asian and the Middle East. The largest transaction by volume was the acquisition by a joint venture led by French retail giant Carrefour of 126 Carrefour-anchored retail galleries located in France, Spain and Italy from European shopping centre group Klépierre for €2 bn. The acquisition was part of Carrefour’s strategy to regain operational control of key bricks-and-mortar assets and manage them through a separate vehicle named Carmila.

Deutsche Annington, Germany's largest listed residential property investor invested €1.5 bn for 30,000 units held within Vitus, a vehicle which had been owned by a group of funds managed by Round Hill Capital, Blackstone, Deutsche Bank and Aviva. Deutsche Annington also paid €900 mln for 11,500 units held within the Dewag portfolio. The two deals combined propelled Deutsche Annington to first place in our ranking of top spenders during H1.

Patrizia Immobilien, another listed German property company, led a joint venture that paid €1 bn for the Leo I portfolio, 18 office buildings in the German state of Hesse. The other three €1 bn-plus deals were carried out by parties from outside Europe. The largest of these was also the largest single asset deal of H1: US private equity firm Lone Star buying the Coeur Défense in Paris – the biggest office property in Europe – for €1.3 bn.

Transaction data compiled by PropertyEU Research indicates 13 investment companies and joint ventures invested €1 bn or more via one or more European real estate transactions in the first six months of this year. Seven of the investor groups have European roots with the other six hailing from other corners of the globe. Deutsche Annington, the Carrefour JV and US private equity giant Blackstone each invested over €2 bn.

See the September edition of PropertyEU Magazine for more on deal activity in H1 2014