International retailer expansion across Europe’s key retail markets has continued apace in the past two years, driven by a search for growth. London, Paris, Milan, Rome, Munich and Berlin, all cities with a global appeal, have successfully attracted new retail brands, despite recent headwinds that have plagued Europe’s economy. A significant pick-up in retailer expansion has also been observed in the regional cities of the UK, France, Germany and the Scandinavian markets, as retailers focus on mature stable markets with healthy fundamenta

There was €12.2 billion of closed European commercial real estate loan and real estate owned transactions 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 billion 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.

GE is selling a portfolio of commercial real estate loans and assets to Blackstone and Wells Fargo for $23bn (€21.7bn).

The bulk of GE’s assets from its GE Capital Real Estate arm will be offloaded as the firm focuses on its industrial businesses. The deals are due to close in the second and third quarter.

GE said it has letters of intent from other buyers for an additional $4bn of commercial real estate assets.

There has been good news for the residential market in Spain with sales steadily increasing and now the country’s commercial property market, particularly in Madrid, is striding ahead.

The real estate investment management business of French insurer AXA has completed the acquisition of 381 banking assets in Spain in a deal valued at €308 million, it announced today.

AXA Real Estate Investment Managers struck the deal on behalf of a joint venture between two of its institutional investors, neither of which it named, with URO Property Holding, a Spanish REIT owning more than 1,100 Santander-occupied properties.

URO was floated in February by Santander as a tax-efficient means of holding banking properties that were sold and leased back in 2007, but were since retaken after its owner defaulted on its debts and filed for bankruptcy. Santander is the REIT’s largest shareholder, while other banks including Caixabank and BNP Paribas are also shareholders. 
 

Corestate Capital of Zug, Switzerland, has formed a joint venture with Inmobiliaria Espacio and OHL Desarrollos of Spain to pursue residential and commercial real estate projects in Spain.

Inmobiliaria Espacio is a project development and asset management firm based in Madrid, and its sister company OHL Desarrollos, a development firm, is part of the OHL Group, also based in Madrid; both are owned by Grupo Villar Mir. The JV, named Iberian Corestate Capital Advisors SL, will work at building a portfolio in Spain and providing investment opportunities for the partners and their international investors.

Europe remains in the early stages of economic recovery, with the pace of growth continuing to disappoint. Nonetheless, there is an expectation that a stronger recovery will gradually take hold over the coming few years, leading to job growth and higher demand for real estate space.

Deflation remains a major concern but this has also provided central banks with room to loosen monetary policy further. This has led to a considerable reduction in the outlook for euro zone bond yields, which are set to remain extremely low for much of the rest of the decade — and, according to Oxford Economics, boosting the relative attractiveness of real estate.

Having seen a period of relative quiet, politics in 2015 will almost certainly be more disruptive. The evolution of events in areas such as Greece and Ukraine will need to be monitored closely.

Ratings agency Fitch forecast that Spanish house prices will bottom out in 2015, depending on how unemployment and mortgage lending evolve.

“When house prices reach their lowest point, which we don’t expect to happen until the end of this year 2014, it’s probable they will have fallen 40% en nominal terms since the peak,” say Fitch.

Spanish commercial real estate returns are back to double digits, according to MSCI.

Returns last year reached 10.1%, up from 0.3% in 2013.

The result is the first time MSCI’s IPD Spain Annual Property Index has reached double figures since 2007’s figure of 12.4%. 

The attractiveness of value add and opportunistic real estate among investors has risen 10 percent since last year, according to a survey of investors conducted by CBRE.

The firm’s 2015 Investor Intention’s Survey revealed that investors were now looking at moving up the risk spectrum as the level of interest in real estate and the capital available for investment was blocking access to core assets. The survey of 280 real estate investors said that access to competitively priced stock was the biggest problem for investors today.  Nearly all – some 91 percent- of investors cited one of ‘availability of assets’, ‘asset pricing’ or ‘competition from other investors’ as the biggest obstacle to investing.

Real estate investment in Madrid tripled in 2014, to reach €3,600 million, compared with €976 million in the previous year. In addition, office rentals in the capital have risen for the first time since 2008, with an increase of 10% with respect to the previous year, due (mainly) to “prime” income, which reached €312/m2 per year at the end of the year.

Following an economic recovery, Madrid registered the third consecutive period of growth in Q4 2014, both in terms of full-time jobs, as well as permanent jobs which contributed to the increased take up of space for the first time in seven years. This trend is likely to continue with the creation of new jobs.

The strong momentum in Europe's office investment market is expected to continue throughout 2015

Orion Capital Managers has sold a Madrid retail asset to Klépierre.

The Plenilunio centre east of the Spanish capital is worth €375m, according to Klépierre.

The French property company said it would use Spain’s new REIT regime (SOCIMI) to complete the deal this month.

A real estate crash in 2008 forced Spain to bail out some of the nation’s banks and seek 41 billion euros in funds from the European Union. Now, as lenders complete the clean-up of their balance sheets and Spain’s economy leads the region’s return to growth, they are tapping other markets. 

Over the last 12 months, Asian property investors have started directing capital to other areas of Europe besides London, which has been their primary investment destination in this cycle, according to research from Catella.

Continental Europe can expect to see huge volumes of real estate investment from the region in the future, the property specialist asset manager said.

AXA Real Estate Investment Managers ("AXA Real Estate"), the leading real estate portfolio and asset manager in Europe(1), announces a record year of transaction activities in 2014, with €10.2 billion of deals, comprising €5.2 billion of equity transactions and €5 billion of debt transactions, completed worldwide on behalf of clients. Total assets under management have increased to €54 billion (2013: €47.7 billion).

With a 10% increase in transaction volumes in 2014, AXA Real Estate led some of the world's largest and most high-profile transactions in 2014. These transactions were often alongside, or completed on behalf of some of the most active and significant investors from Europe, Asia, North America and the Middle East, through either funds, joint ventures, club deals or as separate accounts.

Spanish house prices rose at their fastest pace since the beginning of 2008 at the end of last year, official data showed on Monday, the latest sign that the country's real estate sector is turning a corner.

IMCO has backed Spain’s first ever real estate investment trust (REIT) by investing €50m into Lar España.

The fund manager, which recently developed its European real estate arm, acted as an anchor investor for what is Spain’s first SOCIMI (Sociedad Anónima Cotizada de Inversión en el Mercado Inmobiliario), the country’s equivalent to a REIT.

Slim, the world’s third-richest man, last November agreed to become the biggest shareholder in Fomento de Construcciones & Contratas SA, which is also Realia shareholder, as the construction company sought to cut debt. Slim is among high-profile investors including George Soros who are investing in Spanish companies as they bet that growth will pick up pace as the country emerges from its property crash.