09. April 2010 
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Sales of high street bank branches boost retail property sales
Dominated in its early days by city centre office disposals, the corporate real estate sales market has seen some significant sectoral shifts in recent years. In 2009, the retail sector dominated this market for the first time, comprising 44% of total European corporate disposals, according to new research by CB Richard Ellis (CBRE).
Richard Holberton, Director of EMEA Research, CBRE, said: “There are two key reasons for the recent boost in retail transactions. Firstly, supermarket chains, especially in France, Finland and the UK, have been quick to recognise the opportunity to leverage their covenant strength and lock in low rents by exercising sale-and-leasebacks on their real estate. Secondly, in response to profitability issues, financial institutions have also disposed of many high street bank branches, boosting the retail share of corporate sales significantly.”
Corporate real estate disposals have become an increasingly acceptable form of raising capital in recent years, demonstrated by their popularity with financial institutions in 2009.
CBRE found that real estate sales by major players in Europe’s banking sector were a dominant feature of the market in 2009. In Spain, a recent example was the disposal of a nationwide portfolio of high street bank branches to RREEF / AREA for €1.15 billion in Q3 2009, which was the most prominent example of banks disposing of their corporate real estate in Europe.
Spain and Italy together accounted for 35% of the European market, with around €2.2 billion worth of corporate sales each. Three of the five €500 million plus corporate real estate sales recorded in Europe in 2009 took place in Spain and Italy. The UK’s contribution to corporate disposals accounted for 26% of the European total, notably including HSBC’s sale of 8 Canada Square, Canary Wharf, London, for €860 million in Q4 2009.
Richard Holberton, Director of EMEA Research, CBRE, said: “There are two key reasons for the recent boost in retail transactions. Firstly, supermarket chains, especially in France, Finland and the UK, have been quick to recognise the opportunity to leverage their covenant strength and lock in low rents by exercising sale-and-leasebacks on their real estate. Secondly, in response to profitability issues, financial institutions have also disposed of many high street bank branches, boosting the retail share of corporate sales significantly.”
Corporate real estate disposals have become an increasingly acceptable form of raising capital in recent years, demonstrated by their popularity with financial institutions in 2009.
CBRE found that real estate sales by major players in Europe’s banking sector were a dominant feature of the market in 2009. In Spain, a recent example was the disposal of a nationwide portfolio of high street bank branches to RREEF / AREA for €1.15 billion in Q3 2009, which was the most prominent example of banks disposing of their corporate real estate in Europe.
Spain and Italy together accounted for 35% of the European market, with around €2.2 billion worth of corporate sales each. Three of the five €500 million plus corporate real estate sales recorded in Europe in 2009 took place in Spain and Italy. The UK’s contribution to corporate disposals accounted for 26% of the European total, notably including HSBC’s sale of 8 Canada Square, Canary Wharf, London, for €860 million in Q4 2009.
