Q3 saw the largest European private equity real estate deals take place in London, according to new research from private equity data specialists Preqin, as two significant hotel portfolio transactions worth a combined £1.25 bn (€1.40 bn) contributed to growing volumes worldwide.
The purchase by Aprirose Real Estate Investment of Bain Capital's QHotel portfolio, worth £525 mln (€588 mln), and the acquisition by Henderson Park of a UK hotel portfolio from Tonstate Group for £500 mln (€560 mln) were in the top five portfolio private equity real estate deals registered globally.
Overall, 1,170 private equity real estate deals were announced in all markets in the third quarter of the year, worth a combined $56 bn (€48 bn).
The figure represents a further uptick in global deal volumes from Q2, but a decrease in overall deal values, according to Preqin. Residential and hotel assets saw significant increases in their share of deal values, while industrial and retail assets continue to diminish.
'Despite sluggish activity in Q1, robust deal making in Q2 and Q3 have put 2017 on course to match the activity seen last year,' commented Oliver Senchal, Preqin's head of real estate products.
'The year so far has seen a total of 3,304 deals worth $174 bn (€148 bn), approaching the 3,618 deals worth $185 bn (€157 bn) seen in the first three quarters of 2016. This seems to indicate that private equity real estate firms have been unaffected by talk of whether we have reached the peak of the market and are continuing to do deals.
'What is notable is the long-term shift in the types of assets acquired in PERE-backed deals. Office assets have long constituted the largest part of the deal making market, but in Q3 have seen their share of quarterly deal value decline for the third consecutive quarter.
'Retail and industrial assets are also falling in prominence, while assets such as residential property, land and hotels are becoming larger elements of the market,' he concluded.
