AI Magazine Issue 3 2017

72 Acquisition International - March 2017 The value of deals with targets operating in the real estate industry increased in the second half of 2016, despite a decline in volume when compared to the opening six months of that year, according to Zephyr, the M&A database published by Bureau van Dijk. In total, there were 2,491 deals worth a combined $73,735 million announced over the course of the six months, compared to 2,831 worth $64,427 million in H1 2016. 017 has already seen a significant number of deals signed off in the sector. Since the beginning of January there have been 938 such transactions worth an aggregate $12,312 million. Should results continue on this trajectory, H1 2017 looks likely to surpass H2 2016 in terms of volume, although value appears likely to fall short. Volume has been so impressive in the year to date that despite the fact only six weeks of 2017 have passed at the time of writing, deal numbers have already reached almost half way to the 2,491 signed off in H2 2016. Nevertheless, aggregate value is lagging behind, suggesting lower individual considerations over the period under review to date. There is, however, still a long way to go until the end of H1 and a few large deals could quickly change the course of results. So far in 2017 only one real estate deal has broken the $1,000 million-barrier as Starwood Capital Group Management has agreed to pay $2,850 million for Canadian multifamily real estate investment trust Milestone Apartments Real Estate in a transaction which is expected to close early in the second quarter of this year, once shareholders in the target have given their seal of approval. That deal alone accounts for 23% of total investment in the sector in 2017 so far. This was considerably larger than the second- largest real estate transaction of the year to date; French real estate manager Fonciere des Regions conducted a $425 million stock placing to investors including Delfin. This was followed by Russia- based Bank Finansovaya Korporatsiya Otkrytie upping its stake in Gruppa Kompanii PIK from 4% to 17% in exchange for an investment of $404 million. Although these deals are by no means small in size, they pale in comparison to the aforementioned Milestone Apartments Real Estate deal. If a few more deals on a similar scale are announced in the coming months it would provide a significant boost to values for the period. By far the most real estate investment of 2017 to date has been injected in North American companies, which were targeted in 671 deals worth a combined $6,155 million, placing the region at the top of both the volume and value rankings. In terms of the former, Western Europe placed second with 102, followed by Eastern Europe and the Far East and Central Asia with 76 and 68, respectively. By value the latter was second with $2,898, suggesting higher individual considerations in deals targeting the region and once again highlighting the impact that larger deals can have. Western Europe was third with $2,018 million, while Eastern Europe came fourth with $822 million. To sum up, 2017 is off to a relatively promising start for the real estate industry, particularly in terms of the volume of deals being signed off. However, those watching the markets and hoping for a second consecutive half-yearly improvement in aggregate values will be holding out hope that more large deals will be signed off in the coming months with a view to boosting investment levels for the period. Company: Bureau van Dijk E-Mail: [email protected] Web: www.bvdinfo.com Real Estate M&A Deals 2