European portfolio sales dominated by retail

International real estate advisor Savills finds that in Germany, Spain and France portfolio sales account for a significant portion of total investment volumes with the share of retail stock dominating. On average since 2007 portfolio sales have accounted for just over a third of (33.8%) of all sales in Germany, 29.8% in Spain and 14.2% in France, according to the firm. In 2011 so far 40% of portfolio sales in Germany have been retail stock, compared with 78% and 61% in Spain and France, respectively.

In Spain Savills research shows the dominance of retail portfolio sales has been boosted by a further four portfolios of bank branches sold by BBVA, Sabadell and Caja Madrid. The firm has observed a trend for smaller portfolios, with the average portfolio size standing at €77m in 2010 and €39m so far in 2011. Retail stock has also pushed portfolio sales in France with the focus mostly on small retail units, according to the real estate advisor.

Eri Mitsostergiou, director of Savills European research, says: “Portfolios are a way to quickly obtain equity for the seller and present a number of advantages for the buyer such as geographic diversification, the potential for good returns if sold in smaller lots at more aggressive pricing and the possibility for strong tenants on long-term contracts in the case of sale and leaseback transactions. In general investors have preferred retail as it is considered a safer investment.”

Savills data shows that so far in 2011 retail has dominated German portfolio sales in terms of price volume, with six of the 10 portfolio transactions falling in the retail sector. Among these three of the biggest sales of the year so far, including Cerebus Capital Management’s purchase of 44 cash and carry markets and one logistics Centre across Germany for €700m.

Source: Property-Magazine.co.uk