60 Acquisition International - Issue 3 2018 The value of mergers and acquisitions in the real estate industry increased considerably in the second half of 2018 to the highest level recorded since H1 2007, according to Zephyr, the M&A database published by Bureau van Dijk. There were 2,754 deals worth an aggregate USD 103,147 million in H2 2017, a 25 per cent increase by value from USD 82,568 million invested across 3,065 deals in H1 2017. 018 has already seen a large number of sizeable transactions signed off in the opening two months as 1,073 deals worth USD 31,983 million have been announced so far, with still four months to go until the end of H1 2018. If dealmaking continues on this trajectory, volume would be in line with H1 2016 and H1 2015, although it is likely to decline on H1 2017 unless investment in the industry picks up. In terms of value, the year-to-date has already surpassed the entirety of both H2 2010 and H2 2011, although a single deal with a larger value can have a significant effect on results. There have been 417 deals worth USD 13,648 million announced in February 2018 alone, thereby placing the four week period ahead of January, February, March, April, July and September of last year by value, while value in January 2018 exceeded all but three months in the entire 2017 period. Six deals in the real estate industry have exceeded USD 1,000 million in 2018 so far and together they account for 48 per cent of total value in the year- to-date. The largest of these involves Vonovia of Germany agreeing to acquire Austrian residential property firm BUWOG for USD 4,525 million. This transaction was followed by Blackstone’s USD 3,122 million offer to purchase Canada’s Pure Industrial Real Estate. In addition, Choice Properties Real Estate Investment Trust agreed to buy Canadian Real Estate Investment Trust from Loblaw Companies for USD 3,059 million in the third-largest deal. In total, nine of 2018’s top 20 real estate transactions by value targeted companies in North America, and therefore it comes as no surprise the region is top of both the volume and value tables, with 667 deals worth USD 13,654 million in 2018. There have only been two months of 2018 and, if volume continues on the same trajectory, this could prove to be an impressive year for real estate dealmaking in North America. In terms of value, Western Europe followed with USD 8,105 million on the back of a significant year for investment in 2017 as real estate deals worth USD 51,724 million were announced for the region, the largest since 2007 when dealmaking of USD 80,362 million was recorded. The Far East and Central Asia is currently third with USD 7,308 million, ahead of South and Central America (USD 2,037 million). In conclusion, 2018 has started promisingly, and if dealmaking in the real estate industry continues apace, H1 2018 could easily exceed other recent six month periods and would just need a small number of sizeable investments to reach recent levels. However, the USD 103,147 million invested in H2 2017 looks to be some way away at this point. It is still too early to predict how the year will turn out, although there were more deals announced in January 2018 than in any single month of 2017, with the exception of January 2017, when 677 deals were signed off. Company: Bureau van Dijk E-Mail:
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