Publications

- October 1, 2020: Vol. 14, Number 9

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Liquidity concerns arise over lack of mid-size deals

by Marek Handzel

Mid-market commercial property transactions have dropped by more than 50 percent, creating liquidity concerns for Europe’s real estate market.

In the latest Real Estate Outlook report from UBS Asset Management, the manager says that the quiet nature of the market segment — characterised by deals ranging in value between €5 million and €50 million — is a particular worry as it accounts for a larger share of transactions and as such provides more sustainable liquidity to the market than one-off mega-deals. Sales in the second quarter of 2020 have been slow as buyers and sellers have been shackled by uncertainty and travel and social distancing restrictions, which have prevented large amounts of due diligence from taking place.

Deal volumes in Europe were down by around 32 percent for the second quarter of 2020, compared with the same time last year. However, UBS says that the picture is even worse as some very large entity deals masked the weakness in

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