Covid-19 had a massive impact on the real estate market. In Italy, residential transactions declined by 15.5%, resulting in 4,000 transactions less in comparison with the same period of last year. Nuveen Real Estate estimates that the most impacted sectors in Europe will be offices and retail. Hopefully, the introduction of a European debt fund might mitigate the consequences of the pandemic.
For what concerns NPLs, PWC forecasts new non-performing exposures amounting between 60-100 million euro, primarily consisting of UTPs, due to the expected rise of defaults and bankruptcies in the next 18 months. DBRS Morningstar reports a significant deterioration in the results of NPL securitisations following the pandemic. Between February and April, the average gross amount of collections had reduced by a minimum of 15% and a maximum of 70% compared to the previous six months, resulting in a worsening of the cumulative collection ratio (3%-25.5%). The total gross amounts collected by servicers had also reduced by 2.5% up to 10.7%.
Amundi Real Estate Italia sgr closed the sale for five office buildings in Italy for the total price of 94.25 million euro to Bain Capital Credit. The assets cover a total surface of 65,000 Sq m and are located in Casalecchio di Reno, Rome, Cinisello Balsamo and Milan.
DeA Capital Real Estate SGR completed the acquisition from Kryalos SGR of the real estate portfolio named MeVe for over 86 million euro. The assets are located in Corso di Porta Romana and Piazza Velasca in Milan. The offices have been recently requalified to enhance their value and are currently leased to a primary marketing consultancy firm.
In Rome, DeA Capital Real Estate SGR has recently acquired a trophy asset located in the prime area of Via Veneto from Kryalos SGR for 36 million euro. The asset consists of one level under ground and six levels above ground for a total surface of about 4,000 Sq m. The building has been recently renovated and is leased to Spaces, a company belonging to Regus, which operates in the co-working sector.
Bper Banca has recently approved the securitisation of NPLs amounting to 2 billion euro. The bank might avail itself of the State guarantee Gacs for the senior investment grade component.
Meanwhile, Borgosesia Spa has recently launched Bgs Club Spac, the first Spac (special purpose acquisition company) in Italy. The new company targets private investors looking to participate in long-term real estate investments, which may also include NPLs.
Elliott, together with its minority investor Blue Skye, sold the iconic Bauer Hotel in Venice to the Austrian real estate group Signa for an undisclosed amount. The new owner will also take over the operations for the 210-rooms hotel, which will re-open in July at the latest after the closure due to coronavirus.
Kervis sgr acquired a built-to-suit warehouse located near Verona and sold by Serenissima sgr. The LEED-certified asset is currently leased long-term to Lidl Italia.