- Transaction volume exceeds previous record of 2015
Savills Investment Management (“Savills IM”), the international real estate investment manager, transacted 5 billion Euro in 2016, including sales and new purchases of nearly 2.5 billion Euro each and exceeding the 2015 total of 3.4 billion Euro.
Total activity in Europe totalled EUR 3.9 billion, with EUR 819 million being transacted in Asia. The most active markets for Savills IM were the UK and Germany with transactions totalling approximately 1.2 billion Euro each.
There were 114 Individual and portfolio transactions across 18 countries, includingthe sale ofa portfolio of 17 German office properties with a lettable area of 256,000 sq m to WealthCap for 632 million Euro. Savills IM also sold the property portfolio of its German Retail Fund for 320 million Euro to PatriziaImmobilien AG. The portfolio consisted of 25 well-let retail properties with a total lettable area of 183,000sq/m located in prestigious areas of Bavaria, Baden-Württemberg and Hamburg. Transactions in Asia included an office building at 77 Robinson Road in Singapore’s Central Business District for around 330 million Euro.
A key initiative in 2016 was the launch of the innovative Mercury Fund, which enabled the Italian retailer CONAD to sell and lease back retail properties worth a combined 330 million Euro across central and northern Italy.
Savills IM currently has 1.2 billion Euro available to invest in new assets in Europe and Asia in 2017.
Kiran Patel, Chief Investment Officer at Savills IM, commented:
“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. 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.
“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. 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.”