By Mark McSherry
The sale of company-owned real estate across Europe, Middle East and Africa (EMEA) raised €25.6 billion in 2022 in more than 700 transactions, according to JLL’s latest Raising Capital from Corporate Real Estate report.
JLL said hybrid workplace changes have been an important driver of corporate real estate disposals “with the large-scale adoption of dynamic and flexible working models lowering overall office occupancy rates.”
JLL said: “This has led corporates to evaluate the location of their real estate, how much space they require as well as what type and quality of space they should occupy.
“The race to achieve net zero carbon in the built environment and the risk of ‘brown discounts’ for underperforming buildings are other important factors driving activity.”
While overall investment volumes fell by 14% year-on-year as real estate markets weathered global economic headwinds, corporate real estate disposals exceeded €25 billion for the fifth consecutive year, the report said.
This figure is 9% ahead of the 10-year average. The UK, Germany and France continuing to be the most active markets, accounting for 54% of the total value of transactions in EMEA.
Office and industrial properties accounted for 60% of the total value of disposals in EMEA, with industrial and logistics alone raising €9 billion.
Notable transactions in the market included US travel technology company Booking Holdings selling its international Booking.com headquarters in Amsterdam for €566 million in December, making the deal one of the largest transactions of 2022.
In the same month, UK supermarket Morrisons carried out a portfolio sale and leaseback for £220 million (€253 million).
Retail and leisure disposals rose 26% to €3.9 billion, with grocery and big-box retail seeing high levels of activity as supermarkets looked to unlock capital to finance debt restructuring and store improvements.
In the healthcare sector, the value of disposals remained steady at €3 billion.
Nick Compton, Head of EMEA Corporate Capital Markets at JLL, said: “Businesses faced a confluence of headwinds in 2022 that challenged growth, increased costs, and disrupted supply chains.
“For corporate owner-occupiers, unlocking capital tied up in real estate continued to be an attractive and viable route to build liquidity in a higher cost environment, complementing more traditional corporate funding options, providing costs remain comparable.
“Looking ahead we anticipate private equity owned or controlled corporates to continue driving monetisation activity …
“High-quality real estate – buildings that meet green specifications, complement net zero targets and are spaces where employees want to work – is what everyone wants right now.
“The pace of change is fast, triggering some serious rethinking and we expect that corporate ownership of real estate will continue to decline with businesses looking to drive capital out of property that is obsolete or surplus even as the market becomes more challenging.”