A European platform that trades secondary units in unlisted real estate funds said today it expected deal volume to continue to rise after enjoying a record first quarter of the year.
PropertyMatch, which is co-owned by CBRE Real Estate Finance and US inter-broker, GFI Group, revealed it had just enjoyed its strongest trading quarter since launching three years ago with a total of 48 trades amounting to more than €270 million – and the trend will continue, it said.
Michael Levi, head of indirect property at GFI, said in a statement: “As we approach the formal adoption of Solvency II, we have no doubt clear market pricing will become increasingly important region-wide. We expect both the volume and number of trades to continue in an upward trajectory.”
The volume of first quarter trades recorded by PropertyMatch represents a 240 percent increase on the first quarter last year a as the platform clocked up more than €1 billion since September 2009. Paul Robinson, executive director of real estate finance at CBRE, added: “Transparency and liquidity are two sides of the same coin – both driving confidence and greater interest in the marketplace.”
The news comes just weeks after Connecticut-based Landmark Partners signalled that global trades of real estate secondaries reached record levels in 2011. In March, the firm said the transaction volume in the global real estate secondary market had hit $2.2 billion. That volume, which represents the estimated net asset value at the time of sale, is a 20 percent increase from the 2010 volume of $1.8 billion.
Of the $2.2 billion of activity, about 41 percent was concentrated in US real estate partnerships, 32 percent in Asian real estate partnerships and 25 percent in European real estate partnerships.
The expansion of the real estate secondary market “is reflecting growth in parallel with the tremendous expansion of investment in private real estate investment vehicles during the past several years,” said R. Paul Mehlman, a partner at Landmark. “Going forward, we expect the secondary market to remain quite active as the real estate community is developing a good understanding of the role of the secondary market in facilitating investors’ portfolio management needs.”