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According to preliminary H1 2010 figures from JLL MENA
London, 9th July 2010 - European retail real estate transaction volumes in H1 2010 were more than double the volume recorded in the same period in 2009. Preliminary figures from JLL MENA report that €10.6 billion was transacted in H1 this year compared with just €5 billion in H1 2009. Transactions in Q2 2010 totalled €4.9billion with the average lot size remaining largely stable at just over €50m. The volume of completed transactions in Q2 2010 reinforces the continued positive attitude of investors since September 2009.
Investors remained focused on the three largest European markets; the UK, France and Germany. Whilst Germany saw the greatest volume traded in Q1 (€2.3 billion), ahead of the UK for the first time in a decade, the UK regained its number one position in Q2 with €2 billion traded, more than 40% of the total volume and number of deals during this period.
David Raven, Head of
Shopping Centre Investment at JLL MENA, commented: "During the first half of 2010, vendors began releasing stock onto the market to match the investor demand targeting the sector. Pricing has moved considerably with values jumping some 25% over the past year as a result of yield compression alone. Institutional investors have dominated purchasing over the first half of the year. Looking forward we anticipate that debt based property companies and opportunity funds will dominate buying activity; this will require banks to begin lending on less prime assets. The majority of selling over the second half of the year is anticipated to be undertaken by or at least directed by banks resolving some of their distressed positions"
France saw significant activity in Q2, recording the second largest volume with over €800m traded. Investors are capitalising on recent rare opportunities to secure well leased, high quality product in one of Europe’s most sought after retail markets. Major transactions included the acquisition of the Cap 3000 shopping centre in Saint-Laurent du Var near Nice by a joint venture between French retail specialist Altarea, Dutch pension fund ABP and Crédit Agricole Assurances' Predica from Galeries LaFayette for €450 million. This is a prime example of the strong appetite for dominant, regional shopping centres, particularly from equity / sector specialist partnerships.
Other transactions include the acquisition of McArthur Glen Troyes by Resolution from the Henderson Outlet Fund and the sale of 75% of Espace Saint Quentin by Hammerson to Allianz.
"The French market has witnessed an unprecedented level of retail opportunities coming onto the market, with a number of the major property owners in France looking to expand their operations domestically as well as across Europe. Vendors have been able to capitalise on the strength of investor demand for France, achieving strong pricing levels driven by the attractiveness of the market," said
Khokha Mansouri, Head of Retail Capital Markets,
JLL MENA France.
Allianz Real Estate continued to implement their retail investment strategy with two major acquisitions; firstly the purchase of a 75% stake in Hammerson’s Espace Saint Quentin shopping centre, Saint Quentin-en-Yvelines near Paris for €176 million and secondly the joint venture purchase with Corio of the Porta di Roma shopping centre in Rome, Italy from a joint venture between Simon Property Group, Auchan (GCI) and local developers Toti-Lamaro and Parnasi for €440 million.
Shopping centres remained the principal target for investors in H1 2010, accounting for 72% of the total volumes. Supermarket investments increased in Q2, accounting for almost 10% of the total volume. This was largely due to a significant portfolio sold by Eroski in Spain to European Fund Manager AEW for €150m.
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