European Real Estate Loan Sales Market Q1 2016

European Real Estate Loan Sales Market Q1 2016
Key highlights

€3.7bn of closed sales as activity spreads to southern Europe with Spanish and Italian vendors testing investor appetite

  • C&W Corporate Finance recorded €3.7bn of closed European real estate loan (RE loan) and real estate owned (REO) sales in Q1 2016, a slightly subdued start to the year following a record 2015. 
  • Despite sales volumes being down 91% on those recorded in Q4 2015, activity has been continuing in the background with many vendors reassessing their positions and portfolios before preparing their next moves. 
  • The average size of transactions was just €207m with no “mega-deals” being recorded in the first quarter, allowing a wider range of investors to participate in the market. 
  • Spain has taken the lead, accounting for 50% of the closed volume so far in 2016 whilst Italy continued its strong end to 2015 with over €1.1bn of sales in Q1 2016. 
  • European asset management agencies (AMA) accounted for just 14% of closed sales since the start of the year, although NAMA and Propertize are currently in the market with “mega-deals”. 
  • The UK has seen a significant dip in activity levels following a record year boosted by UKAR’s sale of its €17.8bn Granite Portfolio and several UK lenders completing their deleveraging. 
  • Despite the relatively quiet start to 2016, a significant increase in sales activity is expected over the next six months supported by c. €28.6bn of live sales. 
  • With a further €38.2bn of planned sales, C&W Corporate Finance estimates that the 2016 closed transaction volume will be in the region of €70-80bn.