Several European governments are weighing major property disposals as debt levels rise in response to the global banking crisis and the recession, according to new research from CB Richard Ellis.
Several European governments are weighing major property disposals as debt levels rise in response to the global banking crisis and the recession, according to new research from CB Richard Ellis.
Entitled 'Governments Turn to Property Sales', the report reviews asset disposal plans in a number of major markets including France, Germany, Greece and the UK. The report follows the announcement by the UK government that it is to sell up to £20 bn (EUR 23.6 bn) of commercial property and related assets during the next 10 years while generating a further £5 bn in annual operating cost savings.
With other governments developing similar plans, the report analyses the investor appeal of such assets in the current market and considers the potential for these dispositions to become a more powerful global trend in the coming 12 months.
The volume of government property sales has risen rapidly in recent years. According to CBRE almost EUR 16 bn of government property was sold between 2006 and 2008 across Europe. This compares to almost EUR 4 bn from 2003 to 2005.
Nick Axford, head of EMEA Research and Consulting, CBRE, commented: 'Most governments across the world are seeing a deterioration in public finances as they battle with the impact of the recession and the banking crisis. Many governments are running large deficits and incurring debt to finance bank and other company bailouts. With concerns being expressed about the depth of investor appetite for government bonds, selling off real estate could be a means of raising much needed capital.'
