Investors turn their sights toward southern Europe

Southern Europe has begun to see increasing interest on the part of investors. A number of major portfolio sales have been transacted in Italy, Spain and Portugal.

In Italy, when the final tally has been made, the past year is expected to have total investment volume of approximately €5 billion, reports Cushman & Wakefield. The firm notes that provisional figures show an increase of 20 percent on the previous year.

According to Stephen Screene, head of capital markets Italy at Cushman & Wakefield, “2014 has seen the confirmation of interest in the Italian real estate market on behalf of foreign investors and increasing international capital flows. This momentum will continue into 2015, and we are forecasting the return of core Italian investors to the market together with increased interest from the new wave of APAC buyers who are now firmly focused on continental Europe.”

Retail has been the property type of choice, according to Cushman & Wakefield. The retail market, both shopping centres and High Streets, represented 45 percent of overall Italian property investment.

At the end of 2014, AXA Real Estate and Apollo Global Management completed the acquisition of a 25-property retail and leisure portfolio from Olinda Fondo Shops, managed by Prelios SGR, for €290 million. The investment was made by an Italian regulated real estate fund that has as its two investors Apollo European Principal Finance Fund II and AXA Real Estate Investment Managers.

“This latest acquisition, our eighth and most substantial in Italy since re-entering the country in mid-2013, is further evidence of our belief in the positive long-term prospects of the Italian real estate market. After completion of this transaction, we are managing more than €1 billion of assets in Italy,” commented Alessio Lucentini, head of Italian asset management and transactions at AXA Real Estate, in a statement about the transaction.

Separately, AXA Real Estate acquired two properties in Rome and Madrid for €115 million. The investments were made on behalf of AXA Selectiv Immo. In Rome, the fund acquired the 16,580-square-metre office property at Via Paolo di Dono 223. In Madrid, the fund took a 50 percent stake in the 4,134-square-metre Gran Via 37 retail asset in a joint venture with a French pension fund that has awarded an investment mandate to AXA REIM SGP.

Another Spanish transaction is the €300 million sale-and-leaseback of a 70-property portfolio. The government of the state of Andalucia has sold the portfolio to US-REIT W P Carey and will lease back the assets for a 20-year term. CBRE advised the government on the sale.

Also in Spain, newly-launched Axiare has acquired four office buildings in Madrid and Barcelona and a retail warehouse in Tarragona for €180 million. The 57,924-square-metre portfolio was sold by Credit Suisse Asset Management Immobilien KAG. Axiare, structured as a SOCIMI, was listed on the Spanish stock market in mid-2014.

Finally, in Portugal, Multi Corp, investing for The Blackstone Group’s Blackstone Real Estate Partners Europe IV, has acquired a 65,000-square-metre retail portfolio. The five assets are predominantly located in and around Lisbon.


Source: IREI