According to Cushman & Wakefield's European Real Estate Loan Sales Market Report, closed European commercial real estate loan and real estate owned transactions totaled €12.2 billion in the first quarter of 2015. buy and sell qatar
There has been a spread of operation across Europe, with sales in Italy leading the way. There was a notable rise in operation in Italy at the start of 2015, as anticipated, with over €1 billion in closed transactions. To put this in perspective, this total is more than 2.5 times the amount reported in all of 2014, making Italy the third most active European country in terms of closed transactions in the first quarter of 2015.
Following a record-breaking 2014, the aggregate production of the last quarter was down by 49% compared to the totals for both Q1 2014 and Q4 2014. However, this confirms the record-breaking level of operation seen in 2014, which was boosted by IBRC, NAMA, and RBS deleveraging.
A more telling statistic is that the total volume transacted in Q1 2015 was about 53% of the total volume transacted in all of 2012, demonstrating how much the European CRE loan and REO sales industry has changed in the last three to four years. In 2012, only €23.2 billion in transactions were completed, with almost no sales outside of the four main markets of the UK, Ireland, Spain, and Germany, and only seven'mega-deals' (deals worth more than €1 billion) completed. Since then, not only has the volume of operation risen substantially, but the geography and form of product brought to market has also changed significantly.
Despite the fact that the UK and Ireland accounted for nearly two-thirds of all Q1 2015 revenue, closed volumes decreased by 47% and 68%, respectively, as compared to Q4 2014. This is, once again, a better representation of 2014 than of the coming year. Many UK and Irish banks and asset management firms, such as IBRC, RBS, and Lloyds Banking Group, completed the majority of their deleveraging in 2014, as forecast in Cushman & Wakefield's Q4 2014 European Real Estate Loan Sales Market survey. Despite signs that activity in these leading markets is slowing, some main vendors, including NAMA, still have a mountain of non-core real estate exposure to sort out.
In Q1 2015, several major transactions boosted the closed value, including Permanent TSB's sale of its Capital Home Loans servicing network to Cerberus, as well as the €3.5 billion in related residential loans. In addition, it completed the sale of its €1 billion and €500 million Irish CRE loan portfolios (dubbed Project Leinster and Project Munster, respectively) to Haybell Limited, a newly created company believed to be sponsored by Deutsche Bank and Apollo, in order to cover its capital shortfall following the results of the AQR last October.
Federico Montero, Cushman & Wakefield's Head of EMEA Loan Sales, said, "Despite the fact that completed transaction volumes are slightly lower than in 2014, a number of large transactions are being prepared for the market, which will fuel activity in the second half of the year and attract the attention of eager investors. As anticipated, the number of sales from Italy, which was the third most successful European country in the first quarter, has increased significantly."
Cushman & Wakefield's EMEA Corporate Finance group's Executive Chairman, Frank Nickel, said, "Since the market downturn, vendors in the United Kingdom and Ireland have certainly led the way in the deleveraging period, setting an example for banks and asset management firms across Europe and even globally. As several countries near the end of their exercise plans, countries like Spain and Italy have an opportunity to seize the spotlight and attract a slew of new investors from the United States."
Cushman & Wakefield estimates that closed sales for 2015 would be in the range of €60-€70 billion based on its awareness of key vendors and anticipated industry trends.
The following are some of the report's other highlights:
As early buyers in non-performing loans (NPLs) begin to 'cash in' on worked-out portfolios, there has been a noticeable rise in the amount of secondary sales coming to market.
The top five investors accounted for 69 percent of the closed sales volume in Q1 2015, despite less "mega-deals" being completed; Permanent TSB was by far the most successful vendor in the industry, accounting for 41 percent of all completed transactions in its attempt to cover the capital shortfall highlighted by the AQR last October;
Despite a relatively quiet start to the year, the €49.2 billion backlog of live and expected sales will fuel volumes in the second half of 2015, with NAMA and Italian banks set to be main vendors.