November is an opportunity to take one last look at what has gone before, and then reset for the year ahead. PropertyEU's deals editor Cormac Mac Ruairi highlights a number of key transactions and trends that shaped the European real estate industry over the past 10 months and may impact the market in 2018.
On the investment front, Coeur Défense in Paris and Berlin’s Sony Center, two of Europe’s largest office-led properties, may be putting their chequered histories behind them as they enter 2018 under new ownership. The transactions – in both cases the third sale in 10 years – saw the values of the properties rebound to €1.8 bn and €1.1 bn respectively.
In the logistics real estate sector, the takeover of European assets by Asian companies continues apace. The latest instalment involved Singapore-listed Global Logistic Properties buying Gazeley Europe for €2.4 bn.
In terms of locations, the recovering Spanish market has benefited from ‘investor darling’ status this year with about €8.7 bn of assets changing hands from January to end-September, compared to €9.5 bn for full-year 2016. The multi-billion-euro question is whether this positive trend will continue during 2018 in light of the constitutional crisis simmering between Catalonian nationalism and the central government in Madrid.
Hispania, one of the top hospitality landlords in the country, has already postponed the disposal of its non-core €500 mln office portfolio due to the political crisis.
South African rush
South African investors, meanwhile, can’t get enough of real estate, particularly retail property in Central and Eastern Europe. Two Johannesburg-listed companies, Echo Polska Properties and Nepi Rockcastle, have each acquired about €1 bn of shopping centres in recent months, according to the deals section of our Retail Special Report (page 14).
This follows the pattern of increased focus on prime retail centres by institutional investors, and their proxies in the listed sector. Our latest retail briefing finds investors upbeat about the ability of Europe’s supermarket-anchored shopping centres to cope with the rise of online retail. Yet, RCA data shows the €34.7 bn of retail deals carried out in the first nine months of 2017 was 20% below the five-year average.
During Mapic this month, retailers and investors will be brainstorming out-of-the-box strategies to prepare for the future. They might want to take their cue from Blackstone’s Multi Corporation, the retail developer that is transforming itself into a full-service provider for third-party owners (page 10). Or, Blackstone itself, which, according to columnist Robin Marriott (page 41) is chasing lawyers and dentists as an additional source of capital for its real estate funds.
Read our full Retail Special Report in the November edition of PropertyEU Magazine