PropertyEU Research recorded three transactions above the €1 bn mark in the first quarter of 2016 as investment managers continued to service the huge demand for European commercial real estate.
Preliminary data based on reported transactions compiled for PropertyEU’s Top 100 Investors database indicates that at least 46 investment groups carried out more than €200 mln or more of investments in the first three months of this year, generating a combined volume of €24 bn.
Some of the largest transactions of the three-month period involved platform building rather than the acquisition of single assets or stand-alone portfolios.
The largest transaction recorded so far this involved student accommodation, a niche sector that has really taken off as an institutional-grade investment, particularly in the UK in the last two to three years. One of the key buyers in the top deal was Goldman Sachs. The US investment banking group started the new year on a high by joining forces in mid-January with the British charitable foundation Wellcome Trust in a £2 bn (€2.6 bn) student accommodation joint venture in the UK.
The alliance combines iQ, owned by the Wellcome Trust, with Prodigy Living, owned by Goldman Sachs in tandem with Greystar, a US real estate investor. Goldman will own 68.4% of the new venture, Wellcome 28% and Greystar 3.6%. Known as Vero Group, the joint venture will initially hold a portfolio of 23,500 beds in 25 towns across the UK, just over half the number owned by the country’s largest student housing operator, Unite. Goldman and Greystar bought their first joint student accommodation assets in 2013 and became one of the sector’s largest players with the purchase of a £500 mln portfolio from Knightsbridge Student Housing in May 2015.
Goldman Sachs featured in 43rd place in the March edition of our ranking of Top 100 Investors based on 2015 European transaction volume, with total transaction volume of €2.2 bn. (See also page 62 for a review of our recent Student Housing Briefing.)
The next largest deal over the period related to healthcare, another niche sector that is attracting increasing attention from institutional investors. French investment manager Primonial – which was ranked in 48th place in our Top 100 Investors in terms of 2015 transactions – led a group of investors including asset manager Amundi and insurers Aviva and Suravenir, in acquiring the healthcare portfolio owned by French REIT Gecina for €1.3 bn. The acquisition is part of Primonial’s strategy to build up a pan-European portfolio of healthcare assets.
Redefine Properties is a new entry in the top investors ranking in Europe. The South African company’s strategy is two-fold: the main business took a 75% share in the €1.2 bn portfolio of Poland’s Echo Investment on 1 March, and days later London-listed Redefine International – a REIT in which Redefine Properties holds a 30% stake – completed the acquisition of Dutch insurer Aegon’s UK Property Fund portfolio valued at €600 mln.
See page 52 for this month’s selection of profiles of four Top Investors in Europe and page 32 for our monthly Deal Analysis of European trading activity in February.
This article plus deal list appears in the April edition of PropertyEU Magazine
