Savills Investment Management transacted a record €5 bn in 2016, to exceed its 2015 total of €3.4 bn, the international real estate manager has said.
Total activity in Europe reached €3.9 bn, while €819 mln was transacted in Asia. The most active markets for Savills IM were the UK and Germany with transactions totalling approximately €1.2 bn each.
'European real estate markets continued to perform strongly towards the end of 2016, experiencing both improving fundamentals and further yield compression. The UK referendum on EU membership changed the outlook especially for this market,' commented Kiran Patel (pictured), chief investment officer at Savills IM. 'Rising political and long-term economic outlook uncertainty is pushing investors towards defensive core segments. These assets are expected to benefit from continued demand and should see sustained income returns.'
The business completed 114 individual and portfolio transactions across 18 countries, including the sale of a portfolio of 17 German office properties with a lettable area of 256,000 m2 to WealthCap for €632 mln. Savills IM also sold its German Retail Fund's property portfolio for €320 mln to Patrizia Immobilien. Other key initiatives included the launch of the €300 mln Mercury Fund in partnership with Italian retailer Conad.
'Investors should focus on longer term trends such as demographics, urbanisation and technology and their continued impact on occupier demand for new micro locations and real estate segments,' added Patel. 'Lower yields may tempt some investors to move further up the risk curve and outside their defined fund style. But we strongly advise investors to consider the intrinsic value of an asset rather than chase yields.'
Savills IM said it currently has €1.2 bn available to invest in new assets in Europe and Asia in 2017.
Savills IM appeared in 22nd place in PropertyEU's ranking of Top investment managers based on 2015 European real estate investment volume. The next Top Investors edition and ranking - covering investment in 2016 - is published in March 2017.
