Real estate investors focused on best-in-class offices in strong locations in 2012 to lock in revenue streams as the development slowdown in recent years has restricted the availability of prime retail assets.
Real estate investors focused on best-in-class offices in strong locations in 2012 to lock in revenue streams as the development slowdown in recent years has restricted the availability of prime retail assets.
PropertyEU data on reported commercial real estate transactions of €20 mln-plus in Europe shows offices accounted for almost €30 bn, or 36%, of the overall provisional volume of €82 bn in 2012.
Office volumes were buoyed by sovereign wealth funds deploying their massive firepower in the Big 3 European markets - the UK, Germany and France - and in the capital cities of those countries in particular.
For instance, Malaysia's Permodalan Nasional Berhad pension fund acquired two office properties in London from German fund manager Kanam for about €660 mln.
Brookfield Office Properties, a US-Canadian business, bought the bulk of the office assets held by UK REIT Hammerson for €650 mln.
Invesco Real Estate, acting on behalf of the Qatari sovereign wealth fund, acquired the Cité du Retiro and Néo office complexes in Paris for €500 mln.
Interestingly, the largest single office transaction saw Norway's oil-fuelled pension fund branching out beyond the Big 3 markets to buy Credit Suisse's Uetlihof office complex in Zurich for €830 mln.
While investor demand for dominant shopping centres remained strong in 2012, this is not fully reflected in our data. We recorded just €14.5 bn of large retail deals, 18% of the total volume.
The figure would have been higher had the buyers and vendors in many cases disclosed the financial details. However, from the information available it is clear that investors struggled to access the right product at the right price following several years of low development activity due to the financial crisis.
The acquisition by Austrian company Signa Holdings of 18 Karstadt assets - including Berlin's iconic KaDeWe department store - was therefore the exception rather than the rule.
The largest single-asset retail transactions were Finnish listed property company Citycon and Canada Pension Plan Investment Board buying Kista shopping centre in Stockholm for almost €530 mln and Union Investment's acquisition of the Manufaktura mall in the Polish city of Lodz for almost €400 mln.
Click on the Excel sheets below for the top deals per sector.
PropertyEU will be publishing more on the top transactions in 2012 in the next week's, subscriber-only Deal Watch newsletter and in the January/February edition of PropertyEU Magazine.
