European Real Estate: Time To Be Bold

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European Real Estate: Time To Be Bold

Barclays | European Real Estate

Buy The Buyers

We have argued for some time that European Real Estate management teams would benefit

from aggressive, equity-funded acquisitions, and that they could risk being acquired if they

followed a path of greater caution. See Private to public = Buy the buyers 30 Mar 2026; Buy the

buyers – an attractive opportunity for listed CRE in the US and Europe, 4 Oct 2024; Buy the

Buyers and Buy British 10 July 2024; 2024 Outlook – 'Make or break' 1 Dec 2023. Our conviction

on this view has only increased.

Increased conviction on 'Buy the Buyers'

Private real estate remains highly leveraged across many markets and sub-sectors and is

increasingly feeling the impact of higher financing costs. Elsewhere, closed-end funds face

maturity events, and open-ended vehicles continue to face redemption pressures. At the same

time, subdued transaction markets limit liquidity options for owners.We believe this creates a

multi-year opportunity for listed companies to seek to acquire portfolios, platforms and assets

from increasingly motivated sellers.

Listed companies possess four structural advantages over private owners:

• Lower return requirements than many private competitors

• Attractive equity valuations capable of supporting EPS- and FCF-accretive acquisitions

• Superior operating platforms and greater ability to extract synergies

• Access to capital at a time when many private owners are seeking liquidity

Importantly, we believe the era in which private real estate outperformed through financial

engineering is over. While high leverage and a wide spread between property yields and

financing costs often mattered more than operational excellence during the ultra-low-rate