Lone Star Funds, Cerberus Capital Management, Carval Investors, The Blackstone Group and Oaktree Capital Management were there top buyers of non-core real estate loan assets in the first half of the year, according to data from Cushman & Wakefield’s European corporate finance division.
The company’s finance house said that in Europe, Lone Star completed on €14.967 billion of loans in the first six months, making it comfortably the biggest buyer of assets from in Europe from banks and asset management agencies. The next largest purchaser was Cerberus on €6.295 billion, CarVal Investors on €3.279 billion, Blackstone on €2.218 billion, and Oaktree Capital on €2.101 billion.
Commentating on its findings, Cushman & Wakefield said:“Large US investors such as Lone Star and Cerberus continue to grab the headlines, accounting for 77 percent of all European commercial real estate loans and real estate owned acquisitions in H1 2014.”
Frank Nickel, executive chairman of the firm’s EMEA corporate finance group, added: “US investors have raised an enormous volume of capital targeting opportunistic real estate. ‘Mega-deals’ prove popular to these buyers since they offer a chance to gain large exposures to key assets and markets in one transaction, saving on both costs and time.”
The data is contained in its European Real Estate Loan Sales Market H1 2014 update, which suggested that despite the record volume of commercial real estate and real estate-owned sales seen so far this year, the deleveraging process throughout Europe is far from over.
Cushman & Wakefield’s corporate finance team estimates that €16.3 billion of sales were completed in the three months to July, which is more than six times the volume closed in Q2 2013.
The firm based its findings having researched the non-core real estate exposure of 46 banks and asset management agencies throughout Europe and argued that nine European ‘bad banks’ it analyzed held over 46 percent of the total gross exposure to non-core real estate.
Federico Montero, head of loan sales, EMEA corporate finance, said: “The record loan sales volume seen so far in 2014 has been impressive, although the non-core real estate exposure of €584 billion across Europe signifies the enormity of the deleveraging process still to occur. Additionally, the upcoming stress tests being enforced by the European Central Bank will guarantee that the current high levels of activity in the market will be sustained in the next few years.”
Predictably, the company identifies southern Europe as having had an increased impact. It said activity “spread” to southern Europe as sellers “took advantage of increasing investor appetite in the region”.
It also said that, contrary to the trend observed across Europe in 2013, the average size of loan sale transactions actually increased in H1 2014 to €621 million from €346 million in the same period last year. “This makes it even more difficult for smaller investors to participate in the sales process,” the report further explained.