€12.2 billion of closed European commercial real estate (CRE) loan and real estate owned (REO) transactions were recorded in Q1 2015.
There has been a spreading of activity throughout Europe which has been characterized by sales in Italy. As anticipated, there has been a noticeable increase in activity in Italy at the start of 2015 with over €1 bln of closed transactions being recorded. To put this into perspective, this total is over 2.5x the volume recorded in the entirety of 2014 and makes Italy the third most active European country by closed transactions in Q1 2015.
After a record-breaking 2014, last quarter’s overall performance represented a decrease of 49% on the totals for both Q1 2014 and Q4 2014. However, this reiterates the staggering level of activity witnessed in 2014 which was bolstered by the deleveraging of IBRC, NAMA and RBS.
A more telling statistic is that the Q1 2015 figure is around 53% of the total volume transacted in the entirety of 2012, highlighting how significantly the European CRE loan and REO sales market has evolved over the past three to four years. Not only has the level of activity increased dramatically since then but the geography and type of product being brought to the market has noticeably expanded.
There were several large transactions in Q1 2015 which helped boost the closed volume, including Permanent TSB which completed the sale of its Capital Home Loans servicing platform and the €3.5 bln of associated residential loans to Cerberus. In addition, in its drive to cover its capital shortfall following the results of the AQR last October, it also finalized the disposal of its €1 bln and €500 mln Irish CRE loan portfolios (dubbed Project Leinster and Project Munster respectively) to Haybell Limited, a newly formed entity believed to be funded by Deutsche Bank and Apollo.
From its knowledge of key vendors and expected market trends, Cushman & Wakefield anticipates closed sales for 2015 will be in the region of €60-€70 bln.
Source: Cushman & Wakefield