The real estate arm of global investment manager Barings carried out $18.5 bn (€15.4 bn) of global transactions last year, 21% up from $15.3 bn in 2016. In Europe, Barings Real Estate tripled its volume of acquisitions compared to 2016, and including disposals, finished 2017 with more than $2.2 bn (€1.9 bn) of transactions.
Barings Real Estate is part of Barings, one of the world’s largest diversified real estate investment managers. Reporting its 2017 volumes, Barings Real Estate said it expected to be 'equally active' during 2018.
An overview of the firm's $18.5 billion of transactions in 2017 include equity acquisitions and financings totalling $2.9 bn; executing and advising on $3.2 bn of equity disposals; $7.5 bn, or 41% of the total transactions, in real estate debt; and $2.5 bn of global REIT securities under management.
Europe
Transaction volumes in Europe, including direct acquisitions and disposals, were more than $2.2 bn (€1.9 bn) in 2017. Acquisition volumes tripled those achieved during 2016, showing continually increasing investor appetite for pan-European investment strategies. Additionally, the team originated $995.4 mln (£720.5 mln) in core and structured debt investments and, as a result, grew European debt assets under management by 20% to €5.4 bn (2016: €4.5 bn).
Barings said that the ongoing performance of its real estate platform in Europe was driven by a clear focus on pan-European core and value-add strategies, built upon a local, on-the-ground network with a presence in major, strategic regions. The firm’s footprint now includes over 100 employees at offices in 13 European cities, with plans to support this continued growth and further expand its European team in 2018, both by geography and dedicated real estate disciplines.
Charles Weeks, head of Europe at Barings Real Estate, said: '2017 was a record year for Barings Real Estate – Europe, with acquisition volumes more than triple 2016 levels and diversified transactions across all geographies, property sectors and risk strategies. This increased activity is a result of our strategy to scale-up our European platform and has enhanced our ability to offer an expanded range of our pan-European investment products to our growing client base.
'Clients tell us they want specialists: local knowledge combined within a pan-European, global approach to investing, and that is exactly what we now have. More than ever, we are well placed to take advantage of opportunities in the market, apply our best-in-class asset management skills and, in turn, deliver strong returns for our clients. Global expansion continues to be one of our key priorities and, backed by our increased volume of transactions in key regions, demonstrates our ability to provide attractive investment opportunities for our expanding international client base.'
Top Investors
Barings Real Estate's 2017 European transaction volume represents a 111% increase on the previous annual figure of €900 mln, which put the company in 100th place in PropertyEU's Deals and Dealmakers ranking. That ranking, published in March 2017, was based on European real estate transaction volumes in 2016. The next edition of the ranking will be based on 2017 activity and is published in May this year.
Barings 2017 deal highlights
Barings listed in its report several highlights across core and value-add transactions, as well as debt finance deals, during 2017. These included a record transaction volume of almost €1 bn in Germany. The main deals in this market were the acquisitions of the Vattenfall-leased office in Berlin (pictured) and Unna in Dortmund, one of the largest logistics assets in Germany.
Barings also grew its footprint in Spain, with the deals including the acquisition of four properties across retail and logistics totalling €173.7 mln. One of the main deals was the acquisition of Berceo Shopping Centre in Bilbao.
The firm was also active in Finland, where it acquired three retail, residential and hotel properties for a total of €97.5 mln. Barings Real Estate also completed the disposal of a 50% share in Kamppi, a major shopping centre in downtown Helsinki, for €265.5 mln.
Other transactions took place across Europe, including offices in the UK totalling €149.6 mln; retail and office properties in Italy totalling €58.4 mln; and logistics acquisitions in France.
Debt
Barings achieved core debt originations of £450 mln (equivalent to €506 mln at end-2017), with loans secured by the 30,500 m2 Liver Building in Liverpool; a new 28,800 m2 Grade A office in Manchester; and the Café Royal Hotel in Piccadilly with ground floor retail fronting Regent Street in London. Some £277 mln of structured debt originations were closed across the UK, with sectors including London micro-living, greater London residential development, pre-let office development, office refurbishment / lease up, and two cross-collateralised student developments.
