Savills Investment Management (Savills IM), the international real estate investment manager, transacted more than €3.6 billion globally in private real estate equity transactions in 2022 including c. €3.1 billion in Europe and c. €540 million in Asia.
Savills IM completed those 112 transactions across 14 countries in 2022, including around €2.1 billion of acquisitions and €1.5 billion of disposals, resulting in a net investment of c. €600 million. 2022 marked another impressive year for Savills IM’s office platform with over €930 million transacted. The Group’s industrial and retail platforms also performed strongly with over €900 million and €770 million transacted in each sector respectively over the year.
European transaction highlights included amongst others the acquisition of a newly constructed logistics complex in Germany, on behalf of Savills IM’s European Logistics Strategy, as well as advising on the acquisition of a newly constructed mixed-use building in Berlin for a German insurance company. Savills IM also completed the sale of several assets that exceeded return targets ahead of business plans, enabling investors to realise profits. In Asia-Pacific, Savills IM completed the acquisition of several assets for its flagship pan-Asian strategy, including a 13-asset portfolio of residential buildings totalling 576 rentable units across Greater Tokyo and central Fukuoka, as well as a 75 percent interest in Forest Lakes Shopping Centre in Perth, Australia, for a purchase price of c. €54 million.
DRC Savills IM, Savills IM’s dedicated commercial real estate debt platform, continued to deploy capital, with eight new investments across four countries totalling c. €289 million. Investments were made across all three of DRC Savills IM’s lending strategies, Core Plus Senior, Whole Loans and High Yield Debt.
Alex Jeffrey, Global Chief Executive, Savills IM, commented: “The macro environment in 2022 was dominated by global economic and geopolitical developments, with a prevailing risk-off sentiment among investors putting pressure on capital values and occupier performance. Against this backdrop, I am encouraged to see our network of on-the-ground experts across 17 locations continuing to secure high-quality and attractive opportunities for our clients. Despite a challenging year, bright spots have emerged in sectors such as living and real estate debt, and an increasing focus on ESG credentials provides opportunities for those investors able to maintain quality across portfolios. Our achievements as a firm in 2022 showcase our expertise and experience across a range of sectors and regions, and I believe we are positioned well to weather the global headwinds affecting all investors and continue to perform strongly in 2023 and beyond.
Dale Lattanzio, Managing Partner, DRC Savills IM, commented: “DRC Savills IM continues to be one of the few lenders in the market with a lengthy track record in originating loans across both the UK and the European continent. Although the macroeconomic backdrop led to the lending community adopting a more cautious approach in 2022, the resultant constrained supply will provide opportunities for non-bank specialists to step in and fill the gap left by traditional lenders. We remain ready to deploy capital and fulfil the strong deal pipeline we anticipate in the year ahead.”
Kiran Patel, Global CIO and Deputy Global CEO, Savills IM, commented: “Despite a year filled with uncertainty, we have been proactive in selling many assets, 49 in total throughout the year. As in the previous year, 2022 was another year to bank profits and to hold equity as the repricing emerges. Currently, we have over €1.2 billionn of investment purchasing power. Although headwinds remain, like inflationary pressures and elevated levels of interest rates which continue to impact real estate markets across all regions, we are confident in seeing opportunities as commercial real estate continues to re-price. We expect industrial & logistics to show resilience as competition for land intensifies particularly around urban centres, residential strategies in the purpose-built student accommodation and affordable living areas which continue to be supply-constrained, and real estate debt to continue offering attractive risk-adjusted returns for those lenders able to identify resilient lending opportunities. 2023 towards the second half of the year could offer itself as the beginning of an attractive entry point for the next cycle.”