TOP INVESTORS Savills IM transacts a record €5.5b in 2017

Savills Investment Management carried out a record €5.5 bn of commercial real estate transactions during 2017. Some €4.5 bn took place in Europe, with Asia accounting for the remaining €1 bn. 

The international real estate investment manager said that the total consists of €2.55 bn of acquisitions and €2.95 bn of disposals. 

The total tops the firm's previous transaction record of €5 bn in 2016. That performance put Savills IM in 5th place in PropertyEU's Top 100 Investors, published in March last year.  The ranking is based on European real estate transactions. The latest edition, ranking the deal and dealmakers in 2017, will be published in May. 

Kiran Patel, chief investment officer at Savills Investment Management, commented: 'European real estate markets performed strongly in 2017, experiencing positive rental growth and further yield compression. Market data suggests the UK regained its title as the biggest property investment market in Europe following the impact of Brexit, largely supported by Asian capital flows.'

Patel added, 'Looking ahead, there are a number of risks emerging in Europe, including political tensions, a continued weight of money chasing the sector and the consequential impact of a tapering of Quantitative Easing. But we believe the attraction of secure and stable income returns associated with strong supply and demand fundamentals remain strong. Urban logistics, offices in certain major cities, retail parks and other selective retail formats, socio-infrastructure assets and alternatives are expected to outperform.'

Savills IM saw total activity of €4.5 bn in Europe and €1 bn in Asia during 2017. Markets in which the firm was particularly active included the UK, Italy and Japan, where volumes were €1.73 bn, €919 mln and €845 mln respectively. There were 147 individual and portfolio transactions across 17 countries coinciding with Savills IM local platform of 18 real estate offices.

Some of the highlights in activity included the purchasing of over €600 mln of London offices, the purchase of a portfolio of retail warehouses from IKEA Centres in Sweden for €130 mln  for the newly launched Nordic III fund and the purchase of four European assets on behalf of a strategic Asian partner for €450 mln.

The €2.95 bn of sales represented a mixture of disposals from the German mutual funds, such as the sale of a €480 mln European office portfolio. There was also an element of profit taking in accordance with asset and fund business plan. Examples of which include the sale of a retail asset in Berlin out of the Europe II fund and a logistics asset in Berger, Norway as part of the Nordic Logistic Fund II as well as the €365 mln sale of mixed-office developments in Italy and two sizeable office assets in Tokyo.

Savills IM had a bias towards logistics in 2017, purchasing over €500 mln of assets across Europe and over €150 mln of this was purchased in Poland on behalf of a strategic partner. The firm also successfully launched two funds and achieved eight new managed accounts. Savills IM has investment power of over €1 bn available to invest in new assets in Europe and Asia in 2018. The firm has an additional €887 mln in exclusivity heading into 2018.

Savills IM was created in 2015 when Cordea Savills, part of the Savills Group, took over SEB Asset Management and its €10 bn of assets under management. The combination had €17 of assets under management in 2016. This figure placed the firm in 43rd place in the Top 100 Investors ranking by European real estate AUM. That ranking was published in October 2017. 

Image: Kiran Patel, CIO at Savills Investment Management


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