Public sector sales in Europe more than double in 2011: CBRE

Sales of public sector assets across Europe rose sharply in 2011, more than doubling to EUR 2.3 bn, according to research from CBRE.

With government debt close to or exceeding 100% of GDP in several European economies, there is a well-established appetite to raise capital from the sale or development of public property assets.

Analysis of the 2011 figures reveals that sales of public sector property assets in 2011 were largely concentrated in four markets; Germany, Sweden, Russia and the UK. These markets accounted for 75% of public sector property sales across Europe.

In Sweden disposals totaled EUR 515 mln in 2011, representing 22% of activity across Europe. Transactions totaled EUR 470 mln (20%) in the UK, EUR 440 mln in Germany (19%) and EUR 330 mln in Russia (14%).

With investment in public sector assets largely confined to Europe’s more robust economies, CBRE warns that those countries which have the most pressing need to restore public finances, notably Greece, Italy and Portugal, may find it challenging to attract buyers for government-owned assets.

'Given that the investment market as a whole increased by 7% in 2011, a much larger rise in public sector asset disposals is significant and indicates that there has been a concerted effort by many European governments to raise capital from their property portfolios,' said Richard Holberton, Director EMEA Research and Consulting, CBRE. 'However, the concentration of activity in four of the stronger European markets suggests that, in 2012 and beyond, those countries which are in a more unstable economic position will find it increasingly difficult to implement large-scale disposal programmes.'