- The total size of the Euro REITs market is now as large as €220 billion in Investment Grade paper, making it one of the biggest sectors within the Investment Grade Credit market.
- Of the total size, some €13.5 billion is comprised by Hybrids.
- €50 billion of the total REITs market is Euro issuance for Non-European domiciled REITs (i.e domiciled in the US and Asia). During January 2022, primary issuance totalled €14.95 billion; this marked the largest month of primary REITs issuance in the Euro credit market.
- Average prices in the REITs sector have declined throughout 2021, and this has continued in 2022. In June 2022, the REITs market took another leg down reflecting the broader Rates market sell-off. For example, LEG Immobilien saw a 20 point fall in its 2029 maturity bond from the beginning of the year. We are currently seeing slow recovery in the sector following the sell-off.
- European REITs can be classified by sector (retail, residential, logistics and office) but also by geography (Nordic, CEE, Core Europe). Issuance has been prolific across the board with different sectors affected differently by the Ukraine war.
- Issuers have conducted buy-back exercises for both straight bonds and hybrids. Recent bond buybacks have been conducted by Altarea €270 million, Citycon €25 million, CPIPG €85 million and Peach ~€50 millon. We have also seen hybrid buybacks from HEIBOS for €868 million face value.
- Trends such as hybrid working, e-Commerce and the on-going Covid pressure on hotels continue to remain a challenge for the sector. In addition, inflation is another issue which does not spare the REITs sector, particularly in its impact on rental yields.
A Day of REITs
We are delighted to invite you to join our Day of REITs on Monday,12 September, 2022. For those who are unable to attend in-person, we are offering the option to attend virtually. Please see below for more details.
Presenting companies
Citycon
CPI Property Group
Realty Income
VGP
Panel presenters
Matthew Fletcher,
Director of European Investor Outreach, EPRA - The European Real Estate Association
Jon Neale,
Head of UK Research, Jones Lang LaSalle
John Feeney,
Head of European Corporate Finance, Mizuho
Franck Delage
Senior Director, S&P Corporate Ratings