UK - Real estate M&A to increase, says GT

The sharp rise in the volume and value of mid-market M&A transactions in the real estate industry ensured that the sector was the most prolific provider of corporate finance opportunities during 2005 with a 19% market share (compared to 14% during 2004). The media and entertainment sector was the second strongest performer in terms of the volume and value of mid-market M&A with a 15% market share (compared to just 9% during 2004).

David Brooks, head of M&A at Grant Thornton Corporate Finance commented: 'M&A activity in the real estate sector has been explosive over the past year. Private equity investors and banks want cash generative assets and they have been drawn to the sector by its robust revenue streams and consistent returns on investment. As the value of commercial property continues to rise and the investor base for UK property derivatives continues to widen, prices are edging up. This is heating up the real estate disposal market and creating competitive trading conditions within the sector.' 'Another key reason that the real estate sector was the focus of so much investor attention last year was because of the hype surrounding REITS, which are scheduled to come into effect this April. The proposed introduction of these vehicles has stimulated investor attention more towards property as an asset class. Nevertheless, the key driver of real estate deal flow is the occupational market. The corporate market investing in commercial property assets shows little sign of abating. However, as the largest commercial property sector is retail, many businesses will doubtless be concerned about the mixed performance on the high street during the Christmas trading period.'

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• Topics
• UK / Ireland
• Real estate
• Consumer
• Media