European SLB Volume Beats Predictions

GlobeSt.com - July 17, 2007

London—Sale-leaseback and single-tenant property sales are on the rise in Europe and there are no signs the trend is likely to end. “There’s been a huge increase in that kind of activity,” says John Knowles, a London-based director in the Europe, Middle East and Africa capital markets group of DTZ, a global real estate services firm. “For the next 12 to 18 months, I don’t see a slowdown.”

Several factors have been driving the increased activity, Knowles explains, including the strength of the global real estate market and the sheer amount of liquidity chasing property. In addition, considerable private equity and M&A activity are altering the way corporations operate, leading to an increased outsourcing of their real estate. Third, there are accounting issues, says Knowles, since most real estate has been held at acquisition cost or book value, and not actively managed or revalued.

“There’s a huge store of real estate on corporates’ balance sheets,” he notes. “That means there’s a hidden store of value at these corporates.”

(The article goes on to site several recent and planned European sale leaseback transactions.) Sphere: Related Content