Global Commercial Property Sales Exceed 700 Billion Euro Real Capital Analytics
The size of the commercial property marketplace is much larger than previous estimates, with 708.25 billion euro of significant sales documented in 2007, according to the latest research of consultancy firm Real Capital Analytics .
Over 32 000 properties in 75 countries were sold for 6.81 million euro or more either individually, in portfolios or in entity level transactions. Given transparency issues that prevent complete accounting of all sales and extrapolating for deals under the 6.81 million euro threshold, the total size of the market in 2007 may well have been closer to 1.02 trillion euro. Portfolio and entity transactions accounted for 42 per cent of volume last year as deep-pocketed investors sought opportunities to make big bets in the sector.
In Europe and North America, property portfolios comprised approximately 30 per cent of all sales, but only 12 per cent in Asia. North America also witnessed considerable entity-level acquisitions exemplified by the blockbuster sale of Equity Office Properties to a private equity fund.
Entity level transactions totaled just seven per cent of volume in both Asia and Europe last year; however, pending and rumored transactions indicate such activity may increase in 2008. Individual (or one-off) property sales totaled nearly 408.61 billion euro (11 500 properties) last year with Europe posting the highest one-off sales volume in both the office and retail sectors.
Just over half of the global sales volume in 2007 involved properties in North America with Europe accounting for another 30 per cent. However, since the credit crunch in August, sales activity has slowed considerably on both continents while leaving Asia relatively unaffected. With no end to the credit crunch in sight, property sales in Asia could surpass those in Europe or the Americas in 2008.
Sales include office, industrial, retail, apartment and hotel properties as well as plots for these sectors. The most active property type was office which represented 42 per cent of total sales, or 296 billion euro. Nearly 110 million square meters changed hands last year, equivalent to all of London, Tokyo and Manhattan combined.
Retail properties were the second most active with 118 billion euro worth of transactions, or 17 per cent of total. Hotels, rental apartments, and plots each accounted for between 11 per cent and 12 per cent of all sales. Industrial assets comprised the remainder.
The composition of sales by property type varied greatly geographically. In Europe and Australia, 75 per cent or more of sales involved office or retail properties. North America had the greatest share of industrial, apartment and hotel sales. In Asia, office properties represented just 25 per cent of sales and plots were the most active property type, accounting for half of acquisitions.
Bulgaria is 41st place out of 75 countries in the 2007 Commercial Property Sales chart with a property market of 1.079 billion euro. A total of 30 commercial property deals has been concluded in Bulgaria in 2007, most of them involving retail properties.
The largest individual property sale in 2007 was the sale of CityCentre Casino&Resort in Las Vegas to Dubai World for the sum of 3.677 billion euro.