Companies are selling their real estate at the fastest pace ever - Crain's New York Business

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Companies are selling record amounts of real estate as they rush to shore up their pandemic-battered balance sheets.

Firms across Europe, the Middle East and Africa sold $32 billion of corporate properties last year, according to a report by broker Jones Lang LaSalle. That was slightly more than a year earlier, even as overall real estate deals collapsed during the pandemic.

Companies are ditching property to “preserve capital and release liquidity, as well as to reshape their portfolios to support post-pandemic business plans,” said Nick Compton, head of corporate capital markets for EMEA at JLL.

A little more than a third of corporate sales were office properties, with volumes jumping 10% from the previous year. All types of commercial real estate sales in Europe plunged by 27% last year, according to Real Capital Analytics data.

Widespread lockdowns cut off revenue overnight for many retail and hospitality businesses in 2020, straining their balance sheets and prompting them to raise capital. Many of the sales involved leaseback agreements, allowing companies to access capital while maintaining their premises. Retailers including the U.K.’s John Lewis Partnership Plc and Matalan were among property sellers.

The forced shift to home working also provoked many businesses to reconsider how much real estate they will need in future.

“What we are witnessing is a wholesale rethink from many enterprises on their relationship to real estate,” said Mark Caskey, chief executive of JLL EMEA corporate solutions.

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Companies are selling their real estate at the fastest pace ever - Crain's New York Business
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