Savills Investment Management (Savills IM), the international real estate investment manager, transacted more than €3.4 billion globally in 2021, including c. €2.6 billion in Europe and c. €670 million in Asia.
Globally, transactions included around €2.1 billion of acquisitions and around €1.2 billion of disposals, resulting in a net investment of c. €900 million. The firm now manages approximately €24.8 billion in assets under management (AuM) as of September 2021.
Savills IM completed 90 transactions across 13 countries in 2021, up 21 percent from the previous year. 2021 also marked another impressive year for Savills IM’s industrial platform with over €1.5 billion transacted. The Group’s Office and Retail platforms also continued strong activity with over €580 million transacted in each sector over the year.
European transaction highlights over the year included the acquisitions of the A2 Warsaw Park logistics centre in Adamów, Poland, on behalf of Savills IM’s European Logistics Fund 3, as well as the Bos en Lommerplein neighbourhood scheme in Amsterdam for its European Food Retail fund. Savills IM also completed the sale of a number of assets that exceeded return targets ahead of business plans for the benefit of investors to bank profits.
Piotr Trzciński, Head of Investment Poland at Savills Investment Management, commented: “In the post-pandemic world of persistent inflation, high stock market valuations and a volatile bond market, real estate continues to offer the diversification, attractive returns with little correlation to liquid asset classes, a hedge against inflation and capital value protection. With almost €6 billion transaction volume, in 2021 Poland has witnessed a resurgence of investor activity with confidence returning and investors seeking to increase their weightings primarily towards logistics and living sectors. I am pleased with our annual result in Poland where we have transacted over €280 million primarily in the logistics sector acquiring prime assets like Castorama BTS, A2 Warsaw Park and 7r Beskid Park II on behalf of our clients. Thanks to these acquisitions as well as value-accretive asset management the value of the portfolio we manage in Poland has surpassed €1.7 billion as of January 2022. Going forward we will continue to explore opportunities in the logistics and the living sector as cornerstone themes of our investment strategy notwithstanding tactical acquisitions in other sectors like convenience retail.”
In Asia-Pacific, Savills IM completed the first acquisitions for its newly launched Asia-Pacific Income and Growth fund including 241 O’Riordan Street, an 11-storey office building in the attractive submarket of Mascot in Sydney, Australia, alongside the acquisition of 10 assets located in popular residential submarkets of central and outer Tokyo, central Osaka and central Nagoya, for its Japan Residential Fund.
DRC SIM, Savills IM’s dedicated commercial real estate debt platform, had an extremely strong year deploying capital in 16 new investments totalling c. €760 million. Investments were made across all three of DRC SIM’s lending strategies, Core Plus Senior, Whole Loans and High Yield Debt.
DRC SIM also raised a further c.€ 1.0 billion of new capital, again across all three of its lending strategies.
Alex Jeffrey, Global CEO, Savills IM, commented: “Despite the challenges presented by the global pandemic, we are encouraged to see our network of on the ground experts across 17 offices in 14 countries continues to secure high quality and attractive opportunities for our clients. Key milestones over last year include the completion of our transformational strategic alliance with leading South Korean insurer Samsung Life, the full acquisition of DRC Capital, and the launches of a contrarian UK retail park strategy as well as the Asia-Pacific Income and Growth fund. I am delighted with our achievements as a firm in 2021, and believe we have an excellent platform for continued strong performance in 2022 and beyond”
Dale Lattanzio, Managing Partner, DRC Savills IM, commented: “DRC SIM continues to be one of the few lenders in the market with a long track record in originating loans across both the UK and the European continent. Our Fund portfolios have been built with a strong focus on sectoral and jurisdictional diversification which is attractive not only to our investor base but also to borrowers who want to transact with an experienced manager who can operate in all major European regions. We will continue to raise discretionary capital in 2022 and fulfil the strong pipeline we are already seeing in the year ahead”
Kiran Patel, Global CIO and Deputy Global CEO, Savills IM, commented: “As we look further ahead into 2022, the correction in the US stock market and the risk of ‘sticky’ inflation will certainly be at the forefront of real estate investors’ minds and we caution targeting low yielding assets which could be most vulnerable. We see ‘beds and sheds’ as the sectors to watch over the next twelve months, with significant opportunities in promising subsectors such as urban and last-mile logistics, light industrial estates and cold storage. We also see attractive risk-adjusted returns and downside protection in real estate debt”
