Europe property loan transactions hit record

The value of European real estate loan and real estate owned transactions completed through 2015 hit a record €85.9bn, according to figures published by Cushman & Wakefield.

The property services firm created by the merger of Cushman & Wakefield and DTZ in September 2015 says its research also suggests that the weight of transactions were skewed to the last quarter; for the first nine months of 2015 the value of transactions trailled 2014’s figures, but a few large deals in the UK and Ireland in the final quarter pushed the full year figure to its new record high.

The last quarter saw UKAR complete the sale of its €17.8bn Granite Portfolio, and NAMA complete its €6.3bn Project Arrow deal. NAMA is the National Asset Management Agency of Ireland, set up in 2009 and tasked with running down to zero a balance sheet of non performing loans that hit the country during its banking and financial crisis. UK Asset Resolution was set up to take on soured loans from the likes of Northern Rock, the lender that collapsed during the financial crisis.

“More than €39.4bn of transactions closed in Q4 alone, representing 46% of the annual total and the most ever transacted in a single quarter,” Cushman & Wakefield said in a statement.

Federico Montero, head of Loan Sales, EMEA Corporate Finance, Cushman & Wakefield, said: “Although the UK and Ireland have again topped the sales volumes in 2015, there has been a real shift in the product vendors are offering. Supported by growth in the underlying residential market, large mortgage portfolios have dominated the headlines.”

Looking to 2016, the company predicts that there will be high levels of activity in the UK, Ireland, Spain, the Netherlands and Italy. It is tracking some €78.6bn of “live and planned sales”, and estimates total 2016 transaction value could hit €70bn-€80bn.

Italy is seen as a particular case as recent legislation affects the market.

“Following the success of other European AMA [European asset management agencies] such as NAMA, the Italians have a good illustration of how best to maximise recoveries. With reforms to enforcement legislation now in place, the Italian market is set to grow further over the upcoming years,” Montero said.

 

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